Accenture to Double Jobs in India

Accenture will double its Indian workforce to approximately 10,000 by the end of next year, a sign that Dell’s recent decision to pull some call center jobs from the country was an isolated move.

The added staff will help the IT consultant build its applications development, systems integration and business processing outsourcing (BPO) divisions.

While Accenture has 83,000 employees in 48 different countries around the world, India is its offshore development hub with major centers in Bangalore and Mumbai. In October, Accenture’s quarterly earnings tripled, due in part, to the rapid growth of these operations.

Business process outsourcing, which allows large companies to offload entire departments such as human resources or accounting, is one subset of outsourcing market that’s growing rapidly. Accenture, as well as IBM , is eager to tap into that market.

Accenture’s expansion in the India, comes a week after Dell return some of its Indian call center operations to the United States after customer complaints. Despite the move, Dell stressed it was committed to India.

Overall, the outsourcing is growing. IDC recently said the market for U.S. technology services will double their usage of low-cost countries in 2004. An IDC study says offshore spending by U.S. companies on technology services increased by 10 percent of total spending in 2003 to $16.3 billion.

IDC sees a quadrupling to $46 billion by 2007, or 23 percent, of total tech spending. India, China and Russia stand to gain the most from the IT spending trend.

Accenture and IBM are not alone bidding for offshore outsourcing contracts. Computer Sciences Corp. , Electronic Data Systems and BearingPoint are also in the market.

While there are concerns in the United States and Europe that domestic jobs are being shipped off to India and other less-expensive markets, there is also research that points to benefits of outsourcing.

A recent report from McKinsey Global Institute says 78 percent of the value derived from the outsourcing activities was retained by the U.S. economy, and only 22 percent was gained by India and other offshore outsourcing destinations.

McKinsey went on to say outsourcing investments delivered results for investors, and ultimately customers. Beyond the savings achieved from outsourcing, the research also found the trade results in increased imports
of U.S. goods and services by providers like India.

While McKinsey’s research points to the economic benefits of outsourcing, there are those in the United States and elsewhere who are sensitive to job losses created by outsourcing.

Britain’s Communication Workers Union said today that 50,000 jobs in the United Kingdom have been lost to India over the past two years. The CWU is concerned about the loss of call center jobs currently employing thousands of people. Several British employers have announced plans to outsource to India.