Bird flu threat looms for offshoring firms

Companies that outsource technology activities overseas are used to facing criticism from customers and politicians but now they face a much bigger challenge: the potential onset of bird flu.Businesses have often promoted the global distribution of activities such as call centres and coding development as a strategic advantage for business continuity -- since their operations are not all centred in one place.

Companies that outsource technology activities overseas are used to facing criticism from customers and politicians but now they face a much bigger challenge: the potential onset of bird flu.

Businesses have often promoted the global distribution of activities such as call centres and coding development as a strategic advantage for business continuity -- since their operations are not all centred in one place.

However, the rapid spread of the H5N1 virus and uncertainty over whether it will mutate into a form that can be transmitted between humans, adds an unexpected new set of variables for companies considering sending core activities into India or the Philippines.

Bird flu was detected in Indian poultry farms in late February and some large firms are already taking precautions.

British Telecom (BT), for instance, is assessing the potential impact that a sudden outbreak of bird flu might have on its extensive Indian call centre operations.

Speaking at the Business Continuity Expo in London last week, BT group strategy director Clive Ansell revealed that BT had conducted a rehearsal earlier this week to test its capabilities in the event that an avian flu panic rendered those call centres inoperable and it was forced to use alternative sites.

"All you need is that combination of humans and birds," Ansell noted. "It's important for people in companies to know that this stuff matters."

Analysts agree that planning for flu-related disruptions will be a critical task for IT professionals.

"Information technology and management professionals must also create plans to minimise business disruption should such an outbreak occur," Gartner's Ken McGee warned in a research note last year.

There is a potential upside to flu disruption for some firms.

Earlier this year, Dell CEO Kevin Rollins remarked that a bird flu outbreak could improve the PC maker's profits, since its home delivery model would be less disrupted than rivals who rely on a presence in retail stores.

However, few firms will be able to take such a sanguine view, and offshore operations aren't the only area that may require attention.

"Take this threat seriously and prepare for an epidemic by setting up ways for your employees to work at home," said McGee.

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