Outsourcing and its Potentials for India - Developments and issues in International Business | International Business - B Com PDF Download

Why India for Outsourcing

The world is discovering the fact that India is a super power when it comes to developing IT solutions. Swept by the current of the latest trend “IT outsourcing to India”, we find many fortune 500 companies like Microsoft, Oracle, Citibank, Morgan Stanley, Wal-Mart, AT&T, General Electric, Reebok, General Motors, Sony, Boeing, Coca-cola, Pepsi, Swissair, United Airlines, Philips, IBM, Lucas and British Aerospace are outsourcing software development to India.

A closer look at the factors fanning the potentials of IT outsourcing in India.

1. India’s human resources

Being the world’s second highly populated country, human resources are a boon by itself. Just as the Gulf is renowned for its natural resource of crude oil, and South Africa for its diamonds, India is proud of the abundance and easy availability of its highly qualified and technically skilled English speaking computer professionals; who are key to success in the field of IT outsourcing to India.

2. Cost efficiency of IT outsourcing in India

Significant cost saving can be achieved by IT outsourcing to India, owing to the wide gap between the personal costs in India and that of the developed countries. Offshore outsourcing to India offers considerable economical benefits for those who are prepared to exploit the advantages of outsourcing.

3. Standard quality that firms doing IT outsourcing in India guarantee

The Indian companies involved in IT outsourcing in India provide high quality work, meeting international standards and complying with the ISO & SEI-CMM standards. Three out of every four SEI-CMM Level 5 companies worldwide is located in India. Thus India promises quality – IT outsourcing in India as it has the potential to furnish these services perfectly.

4. The reliable communication facilities

Excellent telecom, ISP, and cellular networks are available in all cities & towns in the country. India prides in the reliable satellite and submarine communication links that facilitate good band connectivity with the rest of the world. Thus companies engaged in IT outsourcing to India, can be in touch with the vendors without any connection hurdles. This plays a significant role in determining the success of offshore IT outsourcing to India.

5. Technologically advanced outsourcing firms in India

India’s technologies offer excellent software solutions. The applications include Business Process re-engineering, System Migration, Maintaining Legacy system, System integration, eCommerce etc. India prides in outsourcing facilities that are required to compete with quality service providers in the world; which is yet another reason as to why the world prefers IT outsourcing to India.

6. Galloping growth in Indian economy

The service sector in India contributes 51% of the GDP. Computer software export was prominent with a growth rate of 40%-50% per year during the 90s. India being the second largest software exporter in the world its large business houses and public sector units are growing steadfastly towards raising economic growth.

7. Stable government facilitating IT growth

India has a stable pro – IT government whose policies, economy, GDP growth, taxation, power, telecom, industrial parks & special zones have been helpful in improving the infrastructure as well as communication. The government proves to be a great support for software firms by further providing all the basic facilities required for an outsourcing company to flourish thus playing a major role in contributing to the success and well-being of IT outsourcing to India.

8. Indian government policies

• IT is regarded as one of the top 5 priority industries in India. IT is a part of the national agenda, and policies are framed so as to obtain maximum benefit out of IT outsourcing to India.

• The liberalization and deregulation initiatives taken by the government are aimed at supporting growth & integration with the global economy. These reforms have enabled the entry of foreign companies to the Indian market. FDI investment from NRI’s including Overseas Corporate Bodies (OCB’s); owned by the NRI’s are warmly welcomed in India.

• The new National Telecom Policy has invited private participants to the Indian telecom sector.

• The IT bill passed in 2000, gives a legal framework for the recognition of electronic contracts, prevention of computer crime and electronic filing of documents. NASSCOM along with the government is playing a notable role in protecting the interests of the IT sector. Thus with all these help, IT outsourcing to India has reached a point of no turning back.