Big news – German software giant SAP has acquired enterprise risk management software provider Virsa Systems to boost its software compliance skills and strengthen ties with Microsoft. Virsa systems, the privately held US based company had recently bagged office space in the Rajiv Gandhi Chandigarh Technology Park.
The acquistion means that Chandigarh, a city rated as one of the top emerging IT destinations in India, will be home to SAP’s fourth research and development center in India. SAP has offices in New Delhi, Mumbai and Bangalore in India.

After Opera Software, SAP will be the second Europe based multinational company to open its operations in Chandigarh.

A detail coverage about the acquisition is given here

The output per man hour invested by the employees of off shore center should be closely monitored by a review program. It is observed that besides challenging work and a remuneration according to the industry trends, there are several other factors that go a long way in determining the motivation of the employees.

Building a cultural of excellence where employees stand undeterred towards achieving results with innovation and pride is indispensable for achieving high productivity. The company should have a well thought of program to develop this right from the word go. The difference in the work culture and ethics should be carefully thought while designing such as program.

The employee attrition rate in India’s IT industry is signficantly high. Even the off-shore subsidiary operations of foreign players are facing the crisis of retaining employees. It produces a great threat to the productivity of the off-shore operations. This happens because there is a considerable amount of both time and capital spent on training the employees of the subisidiary.

Companies usually turn to increasing the compensation for employees to retain them. This however is no longer helpful in solving the problem as the skilled work force has career opportunities which alot of them give preference to.

Employee attrition rate can be never be totally eradicated. It can only be decreased. The business model on which a subsidiary operation runs is significant is achieving this. Outsourcing more high end responsibilities that offers challenging tasks to the employees goes a long way in helping.

There seems to be a growing concern about loss of business knowledge amongst companies involved in downsizing their employee counts.
The following report appeared in Silicon.com

Allie Young, research VP at Gartner, said in a statement: “Companies have a growing concern about losing control of their intellectual capital and the business knowledge of key employees whose jobs or roles may be threatened by outsourcing, particularly when downsizing occurs.”

An alternate option with these companies is to open their subsidiary operation in the new economy. Cost cutting and retaining control over intellectual capital of the company by recruiting local talent are pre-dominant amongst the several advantages offered by subsidiary operations. After MNC’s, it might now be several medium size IT entreprises in US and Europe who would be rallying to open their offshore operations in low cost destinations such as India.