software outsourcing

A blog related to software development company and offshore software outsourcing

Tuesday, February 07, 2006

Offshore Outsourcing India versus Australia

Before some time when the Australian firm was complaining about the Indian Offshore Outsourcing, cause was not only based on economic arguments but also on social subjects. The main argument claimed was that the Indian organizations were stealing Information Technology jobs from other nations. But we Indian minds cannot indulge in stealing, but we think on grounds as to how far we can be better, faster, and be cheaper in international market. However, for a certain time ago Australia itself started an IT Outsourcing strategy because they discovered their labor cost were less than in Europe.

Now Australia begins with an IT Offshore Outsourcing strategy, what does it mean? While comparing to India the labor costs of them are still too high. Hence, it means that Australian organizations will only get the Software project that Indian Offshore Outsourcing firm didn’t want to consult.
Indian call centers have high productivity by results as compared to the call centre operators in the America or Europe. For example, according to Nasscom, Indian call centre employee makes on an average 98 correct transactions compared to 95 by an agent in the United Kingdom. Besides, that Indian call centre employee would make 120 transactions in an hour compared to an agent in UK for only 100 calls. The Nasscom report also points out that the average speed of answer by an Indian call centre agent is about 8 seconds; while the average speed of answer by a call centre employee in the United States is 20 seconds.

Offshore Outsourcing

The organizations with Offshore Outsourcing their back office work to India save near about 60 per cent of their cost per year, studied by the National Association of Software and Service Companies. The 70-80 per cent differential in wages between the parent location in the United States or UK and country like India is more reasonable in offshore processes. But due to interaction costs increase by 10-20 per cent in India as it is a remote location, which results in 40-60 per cent net savings for the Offshore Outsourcing processes.

The amazing thing is to see how nations can change its mind after discovering the advantage of IT or Software Offshore Outsourcing. The factor stands in India's advantage is the labor cost advantage, the main cause of the cost savings is likely to exist for the next 25 to 30 years. The savings are directly related to the amount of work moved to offshore country like India, the Nasscom points out that, insurance and banking generates the major of savings because of the high proportion of processes that can come as Offshore Outsourcing work.

However, Australia can not complain anymore about unsocial methods in Offshore Outsourcing because they themselves are driving this way from quite some time. The only chance for Australia to get more leads than Indian Offshore Outsourcing organizations is to be better in quality, and this is the second big problem of the Australian software development economy. There are no doubts about the quality, scalability and reliability about Indian Offshore Outsourcing companies but it’s all about to be better, faster, and cheaper in global market.