Monday, July 28, 2008

Outsourcers Hone European Savvy

BANGALORE, India -- On the campus of Infosys Technologies Ltd. here, a group of engineers recently learned the basics of French dining etiquette: Always stand when a woman enters the room, never put your elbows on the table and, most important, don't discuss business during the meal.

Indubala Ashok lectures a class of TCS programmers on the 'do's' and 'don'ts' of communicating with German clients.

Infosys and India's other big outsourcing companies are gambling that such knowledge could make the difference between their success and failure in Europe. Although the engineers tutored in French table manners are likely to stay in India, they soon will be working for European clients. Infosys hopes a better understanding of European culture will help them communicate with their new bosses.

As the U.S. economy slows and the dollar weakens, India's outsourcing industry, which has prospered running call centers and doing back-office jobs for U.S. companies, is increasingly looking to Europe.

Indian outsourcing companies generally have a harder time running customer-service and call-center businesses in Europe than they do in the U.S., where India's large English-speaking population is a major asset. Still, Europe is a huge potential market for their technology-related services, such as computer programming, and other services, such as processing bills. So far, Infosys and its rivals have managed to tap just a fraction of that potential.

That may not change much anytime soon. Labor wields considerable clout in many European countries, and worker-protection laws there make it harder than in the U.S. for companies to move jobs offshore.

As a result, Tata Consultancy Services Ltd., India's largest outsourcing company by sales, generates just 10% of its $5.8 billion in revenue from continental Europe, mostly from Germany, Belgium, the Netherlands, Luxembourg and the Nordic countries. Wipro Ltd. puts the Continent's contribution to its revenue at 15%. By contrast, both companies get more than 50% of their revenue from North America.