Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Massive Blackout In India Tests Outsourcing Companies' Back-up Plan

|About:Computer Sciences Corporation (CSC)

Contingency plans for the outsourcing industry is an important matter and should never be taken for granted. A sound plan in cases of emergencies should be one of the decisive factors of businesses looking to outsource their processes because there are businesses where every hour counts and it may directly affect daily operations. This will help them ensure that their work processes for the following day will not be affected and this will assure them that the security of their data remains intact. Business process outsourcingrelies heavily on business continuity in cases of emergencies such as natural disasters or civil unrest, and it is only expected from outsourcing companies, especially those that promise a quick turn-around time like medical billing services outsourcing companies, to have back up plans to push through with their operations.

Just as the month of July was about to end, India experienced a massive black-out, a black-out considered as one of the world's worst power shortages ever. The power shortage, according to reports, happened on Monday and lasted for 15 hours. However, just a few hours after the electricity was restored, a system collapse happened across India's northern and eastern parts, bringing almost half of the country's population to darkness. The power outage was said to be caused by some regions exceeding the quota on electric consumption and the power minister of India warned that the states that have exceeded their power quota will be penalized.

The blackout may have affected around 600 million people in India but only a small percentage of that population was able to enjoy generators and most of them are from the cities protecting their businesses. Most Indian companies, particularly those outsourcing companies who have facilities in India such as HCL Technologies (NSE:HCLTECH) and CSC (NYSE:CSC) are well-prepared as news reports have suggested that power interruptions frequently happen in the country. But outsourcing consultancy firm ISG's partner, Steve Hall, pointed out that solutions providers have already invested in back up plans that are "capable of providing at least five to seven days of continuous operations in the event of a power failure." Also, it is important that redundancies in the systems are in place. It is suggested for businesses to know whether their solutions provider to regularly check whether their contingency or redundancy plan is in place.

It has been known that it is not only India who experience power interruptions because it has been reported by China Electricity Council that China will have a power shortfall that may reach 40 million kilowatts this year, which will be reflected in regional, temporal and seasonal failures.

It may be seen that these power shortages in major outsourcing destinations are testing the capabilities of outsourcing vendors to provide continuous service under circumstances brought about by external factors. Outsourcing companies who have set up plans to be in effect during emergencies show that they not only value their clients for the sake of earning money, but they also care about the business of their clients.

Share you thoughts with us in the comments section on what else should be in a company's contingency plan.

Author: Jamee C.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: CSC