Outsourcing impact on US companies seen minimal

There is nothing to suggest that the US companies' outsourcing to India have suffered an erosion in their market capitalisation, according to Robert G Eccles, founder and president of the Advisory Capital Partners Inc (API) and senior fellow of PricewaterhouseCoopers (PwC).

"It hasn't happened so far. There is no evidence of a company being adversely impacted in the market because of offshoring to India," Eccles told Business Standard.

Of late, there has been a rising concern that the stock prices of companies outsourcing work to Indian BPO outfits may take a tumble because of the job losses this creates in the US.

There is also a view that Indian call centres do not offer the same quality of services as the US call centres.

As per Eccles, hard-nosed investors in the US are focused on the financial health of companies, which improves by offshoring to India.

He said the ongoing anti-outsourcing campaign was political in nature and would die down once the presidential elections get over.

However, Eccles added that there is a reluctance among the US companies to report their offshoring numbers.

"But it is not a material disclosure. Offshoring accounts for a very small part of the cyclical job loss of 10-12 million every year in the US," he said.

Since 1993 ACP has provided strategic, financial and organisational advisory services to both large companies and fast-growing small and medium sized ones.

Prior to founding ACP, Eccles was a full professor at Harvard Business School, where he was a faculty member of 14 years, receiving tenure in 1989.

Eccles, who has co-authored landmark books like "Value Reporting Revolution" and "Building Public Trust" is on a visit to India to share his perspective on enhanced reporting.

He will also discuss a new global initiative called the Special Committee on Enhanced Business Reporting, in which he is personally involved, with leading industry associations.

He is keen to explore the possibility of Indian companies joining this consortium.

Talking about transparency norms followed by Indian companies in their financial reporting, Eccles said that Indian information technology and BPO companies had reached a position to help set global standards in enhanced reporting.

"These companies have reached a critical mass. I can see a lot of enhanced reporting standards being set by these companies," he said.