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NASSCOM, which just wrapped up an annual conference that drew thousands of people worldwide to Mumbai,

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InformationWeek Daily - Friday, Feb 22, 2008

Editor's Note

India Outsourcing Industry Chief Faces Criminal Prosecution

NASSCOM, which just wrapped up an annual conference that drew thousands of people worldwide to Mumbai, has been hit with a nasty blow. Its president faces prosecution for allegedly failing to ensure the safety of a Hewlett-Packard nighttime call-center employee prior to her murder.

Som Mittal, president of NASSCOM (an organization representing India's IT services industry), was managing director at HP's GlobalSoft unit when a female employee was raped and murdered by a taxi driver en route from her nighttime shift in Bangalore in 2005. Some of India's call center employees work night shifts to service U.S. customers during the day.

The Indian state of Kamataka is prosecuting Mittal under a law governing employee safety, Reuters reports, and the Supreme Court rejected his challenge of the charge in a ruling earlier today. If convicted, Mittal faces a token fine of about $25 and a criminal record, Reuters reports.

This case provides further proof that the practice of employing Indians in nighttime jobs to serve U.S. customers is a faulty and decaying business model in the broader realm of globalization. There are other signs: India's workforce increasingly rejects these jobs because--hello?--they want a normal life. And when an Indian accepts a nighttime job, it's usually only until they find something better, creating turnover problems for both the services vendors and their clients.

CIOs also are finding fault with the model. Genworth Financial, for example, observed particularly high attrition rates among nighttime employees of its IT services provider, Genpact. Between 2003 and 2006, the company launched, "Project Daylight," which called for transitioning the work done in India from 80 percent at night to 85 percent done in that country's daylight hours. In retrospect, "the night shift was designed for short term cost savings, rather than designing your company to be a truly global business," CIO Scott McKay told me in a conversation a few months ago.

India offers a tremendous amount of talent, which is helping to fuel new startups (my colleague Chris Murphy, who attended NASSCOM last week, has been doing some great reporting on this topic from India). But that whole model of chipping away at the operations budget by asking Indians to use fake names like John and Sue and follow customer service scripts at 3 a.m.? It's on its way out, and rightly so. It increasingly appears to be an ineffective way to save money.

Read the rest of my blog and post a comment here.

Mary Hayes Weier
[email protected]

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