| The loss of life in the recent terrorist attack in Mumbai | | | | would have such a devastating impact that most |
| is a tragedy-- the repercussions of which will be keenly | | | | experts feel it is unlikely to occur. One Alsbridge |
| felt on a personal and geopolitical level for a significant | | | | executive recalls meetings with the U.S. ambassador |
| time to come. But what impact will it have on those | | | | to India during the nuclear testing of both countries in |
| companies that buy or provide outsourced services | | | | the mid-90s. He and many other U.S. executives |
| from India? | | | | based in India stressed the importance of their Indian |
| The simple answer is that, while tragic, this attack was | | | | operations and their relationships with Indian companies |
| designed to cause fear and panic but will not disrupt | | | | and how sanctions could greatly harm the interests of |
| business at the macro level. The reasons are many, | | | | U.S. companies. One would expect that those same |
| but first and foremost, the scale of the attack is | | | | conversations took place while Secretary of State |
| unlikely to occur again. India readily admitted that | | | | Condoleezza Rice visited India last week. |
| warnings from the U.S. intelligence community, while | | | | However, “unlikely to occur” may not be good |
| heeded, were not given an appropriate response. That | | | | enough. Given the state of the global economy and |
| is unlikely to be the case going forward; rather, this | | | | the war in Afghanistan, the United States cannot |
| attack is likely to mark a shift in India’s stance to | | | | afford to take a hands-off approach to the situation. |
| become more proactive and focus on preventing | | | | What level of escalation between India and Pakistan |
| terrorist attacks in much the same way that 9-11 did in | | | | will trigger sanctions/restrictions from the United States |
| the United States. When the Twin Towers came | | | | and the broader international community? And more |
| down, it was a tragedy beyond belief, but people | | | | importantly, are you or your providers prepared if |
| across the nation went back to work the next day; | | | | escalation occurs? |
| and no one in the international community stopped | | | | If you have an existing outsourcing contract or if |
| doing business with the United States because it was | | | | you’re planning to migrate services to India or any |
| suddenly unsafe. | | | | other country, the following are a few things you can |
| In much the same way, India will react to prevent | | | | do today to protect your business against the |
| further occurrences and mitigate the damage should | | | | possibility of future violence or another event that |
| another attack occur. Certain micro effects of the | | | | could disrupt your business. |
| terrorist attack will no doubt be felt in the outsourcing | | | | To begin, you need to understand your service |
| industry, such as an increased level of security at | | | | provider’s obligations during a Force Majeure event |
| operations centers and, in the short term, a possible | | | | or disaster. Does your contract provide adequate |
| reduction in travel for meetings that can be held | | | | protection in case future violence or another unplanned |
| virtually instead. But at the macro level, the terrorist | | | | event impacts your business? |
| attack, as unconscionable as it was, will not have a | | | | If the answer is yes, it would be advised that you |
| significant impact on the viability of purchasing and | | | | review the current contractual protections and the |
| delivering services from an India-based outsourcing | | | | service provider’s recovery plans to validate the |
| services provider. | | | | plan currency, last test date, test results and evaluate |
| Indian outsourcing providers Infosys, TCS and Wipro | | | | whether the current plan still provides your business |
| will continue to provide services from Mumbai, as will | | | | adequate protection. |
| U.S. outsourcing providers CSC, HP (including EDS), | | | | If the answer is no, is your business comfortable with |
| Accenture and IBM. The Fortune 500 companies that | | | | the risk of service degradation or outages due to a |
| depend on those services have no reason, let alone | | | | Force Majeure event or disaster? Could your business |
| contractual or operational capability, to take those | | | | withstand the impact of your India-based service not |
| services back in-house. On top of that, Mumbai is but | | | | being provided for three days, three weeks or three |
| one of many tier one cities in India in which outsourced | | | | months? We advise all outsourcing or shared |
| services are provided. | | | | services clients to have contractual agreements and |
| No, the recent terrorist attack, in and of itself, will not | | | | well-tested plans to manage the risk associated with |
| affect outsourcing to India. Rather, it is the rhetoric and | | | | Force Majeure events or disasters. |
| posturing between India and Pakistan that have | | | | A geographically distributed model for service delivery |
| followed the terrorist attack that pose the legitimate | | | | can aid in reducing risk. Having infrastructure and |
| threat. The tension between India and Pakistan spans | | | | expertise in place in multiple cities or countries reduces |
| over five decades and includes three wars. Thus, this | | | | the impact of geopolitical and natural disasters. |
| latest turn of events could be likened to pouring lighter | | | | If you do not have a geographically distributed model |
| fluid on an already smoldering fire. | | | | for service delivery, now may be the time to consider |
| That being said, all-out war between India and Pakistan | | | | adding in that capability. |
| – both of which are nuclear-armed countries – | | | | |