Offshore fuss 'rubbish' says Infosys

THE Australia head of India's largest technology company has lashed out at media coverage of offshoring at St George Bank and Westpac, calling St George's decision to move 70 jobs to Bangalore a "great move".

Infosys Australia managing director Gary Ebeyan said claims of a customer backlash provoked by the The Daily Telegraph urging its NSW readers to "send a message of disgust" to St George, were "rubbish".

St George announced it would outsource jobs to IBM's Indian operations, while Westpac has postponed until November a decision on whether to take almost 500 back-office jobs to India.

"It is unpleasant publicity, but we have never seen that sort of an impact on any of our customers," Mr Ebeyan said.

"For shareholders this is a very positive move. The media is taking the patriotic line, which is unfortunate," he said.

"Some parts of the company are going to be affected and will react negatively, but it's short-sighted criticism that ignores the wellbeing of the company and the majority of employees."

Infosys is India's largest offshorer, with almost 60,000 staff and revenue of $US2.1 billion ($2.8 billion). Its Australian revenue was $91 million for its most recently reported financial year. Its clients include Telstra, ANZ Bank, Esanda and Mayne Logistics.

Senior executives were starting to see that outsourcing IT and back-office services was essential for global competitiveness, Mr Ebeyan said.

Three years ago, such a view was largely confined to chief information officers and IT directors, he said.

"In three years the market share of Australian companies will be eroded dramatically if they don't match the costs of global players," he said.

"Now boards are seeing the necessity of offshoring."

Ultimately, banks were likely to take everything from mortgage processing to financial research overseas in an effort to cut costs, he said.

Banks such as St George were facing overwhelming competitive pressures from non-bank lenders in many of their traditional markets -- including mortgages and credit cards -- while simultaneously being challenged by newcomers such as ING, HSBC and CitiBank, all of which have low cost structures.

HSBC, for example, does much of its data entry in Kuala Lumpur. Executives say HSBC's high-income customer base is not concerned by offshoring.

Some senior managers were cautious about using Indian call centres, Mr Ebeyan said, but they should consider "carrying" local staff and reducing costs by using Indian call centres for their overflow work.

"That way you get a very local feel," he said.

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