Outsourcing to IndiaWednesday, June 08, 2005
Tuesday’s summit on information technology-enabled services and BPO strategy in Hyderabad concluded with much analysis. One analysis related to outsourcing to India released mentioned that companies are able to generate higher cash flow because of lesser investment in telecom, instruments, and physical infrastructure. Wage arbitrage has also led to increased cost savings. Outsourcing to India related to offshore software development and software outsourcing along with BPO is helping customers to achieve 40 to 50 percent of cost-saving. More and more companies are outsourcing because they want to remain competitive and want to concentrate more on their core business. This can be achieved by outsourcing to India. Offshore software development and BPO helps companies to free up their resources and their higher management can concentrate on the core business of the company. According to the Nasscom-McKinsey report, two parameters will differentiate successful business companies in ITES & BPO business – Level of intellectual property a company has and range of services a company can offer. Currently, because of the rapid growth of outsourcing to India, there is a wide gap between demand and supply. This has contributed to a higher attrition rate which is around 25-40%. According to analysis, IT-enabled services in India has generated 150,000 jobs in the year of 2004-05 and is going to generate more in the next year.
Outsourcing to India – Tatvasoft, A software development company