The Offshoring Industry in India: Moving Up the Value Chain?

When American Express launched its Indian rupee card, the operations at its Indian division were revealing. The company found that the cost per transaction from India was significantly lower than those of the more advanced markets and that the quality of the output was also significantly superior. According to Raman Roy, touted as the father of the Indian outsourcing industry, who was in charge of the operations, ‘The real gains were greater because of our execution efficiency, the number of first-call resolutions of customer problems, and the ease with which we resolved the issues (which was purely a function of our more qualified and better educated staff)’ (Knowledge@Wharton, 2003). Realising the substantial advantages of the Indian operations, John McDonald, the controller at American Express, soon added more responsibilities and the Indian unit became a key part of American Express’ global operations. Overcoming a number of technological hurdles, Raman Roy, in charge of the Indian unit, was able to show superior work and also the resultant cost savings that were possible.