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Lehman moves help desk out of India

Offshore backlash grows

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The partial backlash against offshore IT outsourcing has gained another convert: Lehman Brothers has stopped outsourcing its IT helpdesk to Indian services giant Wipro, due to poor quality of service. The trend towards offshore outsourcing is still in full flow, but companies may start to be more skeptical of the assurances made by offshore vendors.

Lehman spokesperson Kerrie Cohen confirmed that the New York-based financial services firm has brought the helpdesk function back in-house. Lehman's top IT executives disclosed some details of the change last month after analyst Louis Miscioscia, wrote in a research report that, "in terms of helpdesk, Indian firms could not provide the level of quality and services Lehman needs."

The IT helpdesk was part of an estimated $70m-$100 million contract that Lehman signed with Wipro and its local rival Tata in November 2002. The bank uses about 450 workers at the two vendors, and claims to have generated savings of between 40 per cent and 50 per cent. Lehman continues to outsource other IT functions, including software application development, applications support, and some IT infrastructure support, to the two companies.

Earlier this month, stories emerged that Dell had stopped routing calls from corporate customers to its call center in India after receiving complaints about the quality of service. According to some reports, the calls are now being taken by customer service centers in Idaho and Tennessee.

Dell dismissed the reports, however, and affirmed its commitment to India. "We're not shifting the work. [Dell] is committed to India and is growing," a spokesperson for the Bangalore-headquartered Dell India operations said.

Some outsourcing decisions are reversed for reasons unconnected with quality. In November, Indiana's state government canceled a $15 million IT contract with Tata after a political row over domestic jobs. Politicians in other states have proposed bans on awarding contracts to firms that use foreign workers.

Given the volumes of money involved, these cancellations will represent a significant dent in the Indian offshore vendors' pockets. It is certainly not enough to turn the tide against the rush to offshore in India, but it may make clients more cautious about swallowing the promises of offshore vendors.

Source: Computerwire/Datamonitor

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