At a time when the Olympics is in the full swing, India has created a new record in a completely different field, and this may be one of those records of which the country may not be very proud. On the 30th of July 2012, a major part of Northern India witnessed the biggest power blackout in the history of mankind. The interconnected northern power grids failed due to overload and about 670 million people went without electricity for several hours.
A huge part of IT/BPO companies in India run their operations from Delhi and surrounding northern states where the power outage was at its worst. The employees of these companies had to face great difficulties coming to work as there was no power in their homes and most of the electric household appliances stopped working. Commuting to work was not easy either, as local trains could not move and traffic signals went out of operation in many parts of the affected areas. So how did India’s IT/BPO sector cope with this massive power outage?
Inside the premises of IT/BPO offices, it was a whole different story, one from which the Indian government could take inspiration. For most of the major IT players like Wipro and Cognizant, it was business as usual as they have reliable power backup facilities. The IT/BPO industry accounts for more than 7 per cent of the GDP of India. Most of the companies in the Indian IT sector depend on diesel to supply electricity to their premises in case of a power failure, a considerable increase in demand for diesel fuel resulted.
The price of keeping an IT company in operation with the help of diesel generators is estimated to cost around 7 lakh rupees (US$ 12,625) a day for a company that has less than 80,000 employees. For larger companies, this cost goes up.
The IT/BPO industry in India does a turnover of about US$ 100 billion and it was imperative that the sector braved this massive power outage to send a positive signal to their clients. Many IT/BPO companies in India have a power backup, which can easily keep them on track for a week and hence, Tuesday’s power problem was not a major issue for these companies. Also, many IT giants like Wipro and Infosys have a major portion of their operations scattered all over the country.
Since the southern part of the country, which consists of cities like Bengaluru (Bangalore), Hyderabad and Chennai were not affected by this power outage, many companies shifted their work temporarily to these offices.
Many Depending on India
An ill-prepared IT/BPO industry in India can hurt businesses all over the world in times such as these, as many countries outsource their IT operations to India. For example, firms like Genpact, WNS, Convergys and EXL Service have set up their respective bases in Gurgaon, a place badly affected by Tuesday’s power failure. These companies work round the clock for customers in counties such as US, Europe and Australia. Their clients come from diverse industries such as airlines, banks and railway services all over the world. Numerous companies in London and U.S. outsource their back office work to Gurgaon, Noida and Delhi. Eurostar, the official rail partner for the Olympics, also depends on Indian IT companies for its operations.
Although Indian IT/BPO companies have put up a brave front and managed to send a positive signal to the world about their ability to handle crisis, all that comes at a hefty price. The price of keeping an IT company in operation with the help of diesel generators is estimated to cost around 7 lakh rupees (US$ 12,625) a day for a company that has less than 80,000 employees. For larger companies, this cost goes up. Additionally, there are other expenses like providing transportation to employees in absence of local train services, which makes any serious power outage expensive to handle for Indian companies.
Ironically, Indian IT companies are the ones best equipped to deal with a power outage when compared to their counterparts in the western countries. The country has a dubious history of unscheduled power cuts and over the years Indian IT/BPO companies along with other industries in the country have learned to live with the unreliable power supply and make suitable backup plans. As soon as the power supply is stopped, one can listen to the noisy diesel generators coming to life in almost all the companies and offices in the major metros areas and small towns, signifying their readiness to cope with the uncertainties of electricity supply in the country.
In a strange way, it also reflects the ‘powerlessness’ of those in power, when it comes to fulfilling the basic infrastructural requirements of the country.