Software outsourcing

Monday, June 20, 2005

Why Software outsource

Software outsourcing is at present booming and 80% of the fortune 500 companies are looking for software outsourcing. The majority of this outsourcing chunk comes to India as it is the preferred destination. Indian software outsourcing service providers are offering low-cost high-quality service in time and within budget which just not prove to be cost-effective but it also helps in improving quality and productivity. As a company when you are going to outsource, you may consider what about your investment in infrastructure, trained IT staff, knowledgebase, etc. Also, when you try to get a feeling of software outsourcing by doing just small project outsourcing, you may not get cost-benefit. Actual cost advantage a company gets over a long period which comes to be 35 to 60%. To achieve a higher advantage, companies require a long term very positive relationship and understanding with the software outsourcing company.

Why Software outsourcing to India

India is the destination where the majority of companies looking for software outsourcing are heading for. More than half of the SEI-CMM Level 5 companies are Indian. That number itself speaks to the quality-conscious software outsourcing industry in India. India is producing nearly 3 million graduates every year and many of the institutes like IIT are world-famous for producing the best brains of industry. That’s why in software outsourcing to India, Indian companies are able to provide world-class solutions in eCommerce, system maintenance, system reengineering, business process re-engineering, internet and intranet development, client-server application, embedded programming, web designing, component-based software development, etc.

Steps by Government of India to promote Software Outsourcing companies

There are many other reasons why software outsourcing to India is more preferred than other destinations. The Indian government is providing more facilities and tax benefits to software outsourcing companies. India has a very good infrastructure and it is getting improved year after year. The IT Act 2000, which was passed by the parliament of India has brought eCommerce within the decree of law and punishments are there for cybercrime. The government is also keeping the software outsourcing industry in its top five priorities. Because of this, the government is taking steps to support the software outsourcing industry. It has approved 108 point action plan to promote IT in the country. This 108 point action plan was submitted by Nation Task fore to promote IT. Also, a separate ministry of Information technology is set up for faster approval and implementation of IT projects, single-window clearance, etc.

Other reasons making India favorable

India is the world’s biggest democracy and since independence in 1947, India is a democratic country. Democracy has given India, a stable government. Indian economy is growing at a rate of 8% at present. And Indian service sectors are contributing 51% of the total GDP of India. And in that, the software outsourcing industry is growing at a rate of 40%. India is increasing its infrastructure privatization. Many western companies are investing in infrastructure here. These all make India favorable for software outsourcing.