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Security Risk in Outsourcing
Both India and Pakistan are suffering from a security problem. Both are subject of warnings from various embassies. India has a continuous problem with Pakistan and Philippines are the home of terrorists. Security is the key concern in outsourcing. In spite of that India has become the favourite destination of offshore outsourcers. It is difficult to understand why so many outsourcing operations are done here in these so called “unsafe” countries. But the version of those people who are in truth foremost the operations in Asia, helps us to get a fairly a dissimilar discernment of the risks concerned.
John Standring, the Manila-based General Manager of outsourcing facility for Safeway, feels that the security risk in Philippines is not much different from those of any big city in the world. He also believes that with proper security measures this problem can be solved. The same advice will be applicable for anyone visiting New York or Washington for the first time.
Shaun Paterson, VP of operations for Thomson Financial, the Canadian global financial information powerhouse, gives a similar opinion. He himself is a citizen of England and says that the streets of Manila are safer than those of London. So Shaun fells that the question security risks are trivial.
Other experienced and sensible managers also give the similar view. According to them the risk of personal injury is higher while driving a car to the airport for an overseas trip than it is being in the overseas country. One American manager points out that America is much more risky place in comparison to India or Philippines. Recent terrorist attacks have proved that.
In spite of all those positive thoughts Business Process Outsourcing is a new concept and managers willing to pursue this have to spend lots of time justifying their plans to skeptical department managers. Security risks are always a key concern. The questions that mostly haunt are – What happen if a bomb destroys our project and kills our people? Will our higher-ranking personnel be kidnap? Aren’t these country very fraudulent? Etc.
A new loom to elucidation the Country Risk is to go back to an earlier generation of offshore outsourcing for electronic goods. Intel, Phillips, Toshiba and Texas Instruments are a few examples of electronic companies that have operated a billion dollar facilities for decades in Philippines. Intel has completed 30 years in this country. During these period companies have seen political, natural, financial disasters in Philippines. But those companies have given an uninterrupted service to the global market.
There are two kinds of Country Risk –one good and one bad. Country Risk that involves violation against the employees or a complete breakdown of law and order situation. So theoretically, these countries are not the realistic destination for outsourcing operations. But India and Philippines have proved that despite several risks they are the paradise for outsourcers. The other risk concerns currency risk. It is good for a company if the local currency drops as this means drop in cost. However, this cannot definitely taken as true as despite no significant drop of currency value in India, it still remains the hottest destination for offshorers.
But one thing is crystal clear that security risk is not much concern to the experienced people who are dealing with this.
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