Software outsourcing to IndiaTuesday, May 31, 2005
India is leading an offshore outsourcing destination for a decade. There are many reasons for that like cheap labor, technological agility, low cost, and faster time to market, huge English speaking talent pool, etc. In today’s highly competitive software development business, offshore outsourcing is becoming necessary to maintain competitive advantage and drive down operating costs. US and European developed countries have discovered 40 to 60 percent cost saving as a result of software outsourcing. And what can be a preferred destination for that other than India? India is a talent-rich country. A huge pool of English speaking and computer literate manpower from Indian colleges can continue to cater to the growing demand of software professionals. India has 200 million English speaking people next to the US which has 250 million English speaking populations.
Software outsourcing hub India is an exporter of software development services to 95 countries. According to Gartner, India is a leader in outsourcing and will continue its leadership until 2010. With export to many countries and in relation to different cultures, India is a leader in global methodologies.
Leading companies worldwide like Microsoft, IBM, HP, Sun have learned that to maintain their competitive advantage and stay ahead in the race and provide better value to their shareholders, they need to reduce cost without compromising quality. For that, India provides highly skilled programmers and project managers who are tech-savvy, reliable, and innovative. Also, Indian companies are have developed world-class systems for global majors. The quality and maturity of Indian software companies can be measured from the fact that over 50% of the SEI CMM level 5 companies worldwide are in India.
Also for software outsourcing, India enjoys the confidence of multination corporations. According to a survey, 82% of US companies mentioned that India is their first choice for software outsourcing. Bill Clinton has applauded India’s brainpower and pointed out that, Indian Americans run more than 750 IT companies in Silicon Valley. He also mentioned, “You liberated your markets and now you have one of the 10 fastest growing economies in the world’. Bill Gates has mentioned that India is an IT superpower. That’s why Microsoft has strategic alliances with Wipro and Infosys for its .NET development platform. GE has a $130 million technology center in Bangalore. It is the largest research center outside the US opened by GE. There are hundreds of multinational companies opening their offices in Bangalore.
The government of India is also keen to develop the IT industry. India is the biggest democracy in the world and has the world’s 10th fastest-growing economy. The Indian government is trying to make India the world’s back office with its 1 billion population. According to Nasscom, India’s revenue from IT-enabled services will rich $16.94 billion. The government has also passed the Information Technology Act 2000 which is now widely known as the IT Act 2000. It brings e-commerce under the law and states punishments for “cybercriminals”. With this, India is in the league of 12 nations that have cyber laws. The government of India is providing tax benefits under STPI, SEZ, and many other schemes to IT companies and promoting IT export. Special policies like single window clearance have been implemented. STPI offers world-class infrastructure and various facilities, incentives to promote software development and export. It also allows 100% tax benefit. Because of all benefits given by the government, the Indian IT business is growing at the rate of above 40% and contributing heavily to its GDP.