Monday, December 20, 2010

Indian Companies Outsourcing to Pakistan? Lessons from Israel and Palestine

Should Indian Companies Outsource to Pakistan?

Idea looks non starter.
If a news story tells you that few Israelis companies are outsourcing to Palestine then idea of an Indian company outsourcing to Pakistan doesnt look that weird

Quoting from above news item, " Israeli CEOs say it's their way of bringing a little bit of peace to their troubled corner of the world. But the real reason they're hiring Palestinians, they acknowledge, is because it simply makes good business sense."

Same remain true for Indian and Pakistan. Apart from similarities in country name initials ( Israel and India starts from I , Palestine and Pakistan starts from P), the painful history and current border dispute is also comparable.

If outsourcing can establish little peace in Israel and Palestine, it can establish little peace in India and Pakistan as well.

And it makes business sense as well . Here's why?

Firstly, Indian IT companies are seeing employee cost escalation in big cities. Companies counter move is to relocate some of their operations in Tier II cities in India where cost and employee attrition is low. Utilizing Pakistan can also be one such counter move to reduce cost and attrition.

Secondly, Indian companies are desperately looking for new growth avenues. Initial business dependence was on US and later focus shifted to Europe. Now when US and European markets are saturating growth will be from new geographies. Utilizing Pakistan even symbolically will help Indian companies geting business from MENA ( Middle East and North Asia ) Region.

Well there are hundred reasons from security to economics for not to consider this route. Still there are few resons to consider it as well. Thoughts to ponder !