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Top 10 Reasons Why You Should Continue To Outsource To India

By Edited Jun 22, 2014 1 0

With the concept of outsourcing coming of age and a number of players making forays in this field, India still remains the number one destination for it. This is not only because India pioneered the business practice, but it is due to the unique standing of India in terms of human capital and infrastructure. As long as India maintains this unique standing, it will remain the number one destination for outsourcing. The good news for the Indian outsourcing industry is that its human resource and infrastructure are on a growth path in terms of quality and quantity. Therefore, the reasons to continue outsourcing to India are countless. Some of those reasons are:

  1. Growing demand for outsourcing: While large business conglomerates like General Electric, IBM and Microsoft have already paved the way for outsourcing, its demand is increasing day by day among SMEs and individual business owners as well. By outsourcing, companies not only reduce their operational costs, they also share the risks involved in the business with their vendors. The Indian vendors, in particular, have in the past, shown their ability to steer businesses of overseas giants past the risks of data security. That is one of the reasons every other company in the developed world – be it large or small - is keen to outsource business processes to India. In outsourcing, America and Europe are the largest customers of India. The IT and BPO sectors amount to $47 billion of business and capture more than 50% of outsourcing industry.

  2. World business environment: congenial for outsourcing: The rapidly changing business trends of the world make outsourcing an integral part of every major business strategy. The marketplace has become so competitive in the recent past that it is impossible to think about profitability without outsourcing. Cutting costs has become imperative to stay in business; and outsourcing has become a necessary tool to cut costs. A recent study shows that companies are able to cut cost up to 50% by outsourcing business processes to India. Not to mention that they do not have to layoff any employee to do so. In a 2011 survey, 85% of Wall Street economists agreed that outsourcing has had a positive effect on the overall economy of the U.S.

  3. Way out of recession: The recession of 2008 spelled doom for businesses across the world. No doubt, the west was worst hit by it. With the help of their respective governments, the economies of the west recovered a bit from recession, but with its relapse in the U.K. and the rest of Europe, the future of businesses again seems bleak. Here also, outsourcing showed the ray of hope. By outsourcing business processes to India, companies are able to answer the tough questions of their investors. Some companies of the U.S.,which have already filed for bankruptcy, are planning to repay their debts by outsourcing key business processes to India. SMEs, in particular, benefited (and will benefit) hugely from outsourcing and thereby cutting back on expenses.

  4. Necessary tool to maintain competitive edge: To maintain a competitive edge in the field of business, a company has to maintain focus on its core competencies. This can easily be done by outsourcing the non-core activities. Big corporations have mastered this practice by relying on the Indian manpower and that is why they are able to maintain their supremacy in their respective line of business.

  5. Politically stable place to do business: India is a safe destination for outsourcing. Being the largest democracy in the world, India is always a safe bet for investment. Besides that, the judiciary here is very strong and impartial. Therefore, in case of any disputes, one can expect a free and fair way to justice. For a client who outsources to India, data security is his main concern. To address this legitimate concern of the clients there are bodies like NASSCOM (National Association of Software and Services Companies) which are actively involved in ensuring data protection. Also, there are strict laws against data tampering or theft.

  6. Strong and business friendly economy: India embraced the liberalization policy in 1990. Since then, it has become a haven for investment. The policies of the government are pro-investment and business friendly. This is evident from the fact that in 2011 India attracted a foreign investment of $1.44 billion. The total investment in IT and ITES sector from 2004 to 2008 was $5797 million. All these figures speak volumes about the safety on one's investment in India.

  7. World class infrastructure: Being an emerging economy of the world, India boasts of a world class infrastructure. In the field of satellite communication, India is second to none. This infrastructure is one of the main reasons behind the boom in ITES sector. Software Technology Parks are spread across the length and breadth of the country. Besides the rail and road transport facilities, India boasts of a robust aviation industry. The electricity sector in India had an installed capacity on 199.87 gigawatt in March 2012. This is the world's fifth largest capacity.

  1. Second largest English-speaking population in the world: India has the world's second largest English-speaking population. This fact gives an advantage to India in the field of outsourcing since its workforce is proficient in this language.

  2. Sound education system: With world-renowned educational institutions like IITS, IIMS and AIIMS, India's education system produces the best technical human resource in the world. Its colleges and universities bring forth about 4 million graduates each year. Also, there are more than 3000 engineering and technical colleges which produce more than 70000 engineering graduates every year. All these facts make India the best outsourcing location in the world.

  3. Large talent pool of well trained human resource: India boasts of a talent pool so vast that it can handle any kind of business process in the world. Be it a simple call center or high end engineering project, you won't face any difficulty in getting the right resource.

India enjoys more than 50% share of the global outsourcing market. In terms of manpower, infrastructure and market share, India is far ahead of its nearest competitors. India will remain the number one choice for outsourcing till the time it maintains its lead in the field of human resource and infrastructure.



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