MD meets Top Dignitaries in Germany

Shaunvir Mahil meets Indian & German Ambassadors at Indo-German Chamber of Commerce in Cologne on 13th June 2013

A host of top dignitaries from both the countries attended the high-profile event, the theme of which was ' a shared economy'. Among them were the German ambassador to India (Michael Steiner, former German ambassador to Italy, United Nations and the Czech Republic), the Indian ambassador to Germany (Ms HE Shrimati Sujatha Singh, former High Commissioner of Australia), the Lord Mayor of Cologne (Jurgen Roters), Co-CEO of Deutsche Bank (Anshu Jain) and Vice President of BITKOM (Heinz Paul Bonn).

“It was a pleasure to meet these top dignitaries and discuss and hear their views on globalization, outsourcing and working towards a ‘shared economy’ between India and Germany. I echo much of their sentiments, namely that it would be mutually beneficial if the two countries increase levels of cooperation in one of their respective strengths - Germany in Engineering and India in Software Development. And this is why offshoring software development to India should not be seen as the nemesis it is often portrayed to be, but rather just one side of the trade coin,” said MD Shaunvir Mahil, following his recent trip to Germany as a part of the Nasscom-led Indian delegation.

The trip to Germany was rounded off on the 14th of June with the 11th Indo-German ICT Conference organised by BitKom-Nasscom in Cologne, Germany. Whilst the big German companies have been outsourcing software development to India for years, the German small to medium sized enterprise (SME) sector has yet to follow suit, this despite there being an IT skill shortage in Germany.

German SME outsourcing will grow

“Despite the current trends, I believe the German SME outsourcing sector will grow significantly in the coming years. At the Bitkom ICT conference, I shared this view with Dr Katharine Grimme (Principal Consultant, Outsourcing & BPO, Pierre Audoin Consultants) and she disagreed with me saying that German SMEs are governed by strong cultural influences, and like to keep their work local.

The world, however, is shrinking by the day. Instead of just MNCs, in the future many SMEs will increasingly be able to compete on a global platform rather than just remain confined locally. But a global market place will result in greater levels of competition and so global solutions will need to be sought, and one of those solutions will be offshoring.

Constantly evolving technology

What you also have to factor into the equation is the fact that technology is also constantly improving. Faster internet connections, for instance, will only make high-powered video conferencing the norm. Just like how Cloud computing is the latest innovation to change how we work at present, many more innovations like this will continue to transform the day-to-day office environment. Such technological advancements will only make offshoring, collaborating and working remotely easier and more seamless.

In the backdrop of such a global and more technologically advanced environment, I can’t see a future cultural mindset where German SMEs will continue to ‘ship’ IT programmers into Germany from other countries rather than just offshore or outsource to India. The only constant in culture is that it changes with time and so, respectfully, I don’t believe Dr Katherine Grimme's cultural argument is a strong one,” elaborated Mr Mahil. vs Conventional Outsourcing

Other Bitkom members mentioned that there is a reluctance to outsource because there is an inherent fear about handing over work to a third party.

“I completely understand this fear. And this is exactly where our model can be the ideal solution as opposed to conventional outsourcing. With us, a German SME is not outsourcing but rather creating its own presence in India. It can continue to keep its work in-house even if it offshores. Hence, our model makes it easier for SMEs to venture into India and tap into its vast talent pool,” said Mr Mahil about the trip.

Demographics may play a big role

Anshu Jain, Co-CEO of Deutsche Bank also made an interesting point about how demographics would play a greater role in propelling the outsourcing flow to nations like India. Germany, on an average, had a fairly ageing population while India's largest chunk – the working age-group – had a young population.

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