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'Wipro is fully committed to Dubai'

In an exclusive interview with Khaleej Times, Raman Sapra, Regional Sales Manager Middle East, explains how outsourcing in Middle East has established strong methodologies for vendor management for successful execution of these outsourced projects.

Q. What is Outsourcing? What are the various types of outsourcing?

A In the simplest terms, Outsourcing is the practice where a company transfers the responsibility of one or more of its functions or activities to another company, which would otherwise have been performed within the organisation. The service provided can be a small application development or a critical function to manage, maintain and run some portion of its business. Organisations outsource their work to other companies to leverage their expertise in that field and get significant benefits in cost and quality, thereby increasing their competitiveness. There are various forms of outsourcing. Project Outsourcing refers to a situation where a customer gives an order to an external service provider (ESP) to implement a project. For example a manufacturing firm getting a software application development outsourced from an external service provider. More and more organizations are now separating their core operational processes from non-core support processes, and outsource the latter to a service provider to realise greater operational efficiency at a lower cost. This is referred to as Business Process Outsourcing (BPO). The service provider takes complete responsibility of delivering the service, which enables the outsourcing company to achieve better focus on its core business. Ex. Outsourcing of the IT function by a Bank, Outsourcing of the payroll function by any company, Outsourcing of Call Centre function by a company.

Q. What is the difference between IT outsourcing and business process outsourcing?

A By IT outsourcing we mean outsourcing of IT applications, IT infrastructure or outsourcing of relatively large software development projects. Business process outsourcing encompass broad spectrum of activities that are non-core to an organization. It may involve outsourcing of functions such as call centre, customer support, payroll, HR, finance, accounting etc.

Q. How big is the outsourcing market globally?

A According to a Gartner Research (December 2004), by the year 2008, external service providers (ESPs) will be able to deliver better IT services and will be more competitive than internally provided IT resources. As a result IT spendings of organizations across the globe on ESPs will grow at a much faster rate than their spending on internal IT budgets. The worldwide spending on External IT services, which stood at $ 568 Bn in 2003, is expected to touch $ 762 Bn in 2008; about 59 per cent of total IT spends.

Q. How many Wipro engineers are working in the Middle East? Do you plan to add more?

A Presently, over 400 Wipro Consultants are working across customer projects in the Middle East. A good number of consultants are also working offshore from our development facilities in India. Further any increase or decrease in workforce in future will depend upon specific requirements at that point of time.

Q. Is Wipro moving on to the new outsourcing zone that is being developed in Dubai?

A Wipro is extremely committed to Dubai and UAE. Wipro's Dubai office functions as the regional office, taking care of its operations in the Middle East. Wipro has recently expanded office in Dubai Internet City.

Q. What are your tips for companies in various vertical industries on adopting the outsourcing model?

A Outsourcing is a strategic decision for a company whether it is for a small work or critical business operations. IT has become a critical component in almost all industries be it Banking, Manufacturing, Telecom, Utilities or Government. As competition in a global environment increases, the need for greater competitiveness, efficiency and productivity will become more urgent. In such situation the option of building these non-core competencies within the organisation is not only time taking but also more costly.

Outsourcing model ensures better operational efficiency and better quality at a lower cost thereby giving them a competitive edge.