The future of outsourcing in India

The future of outsourcing in India

India retains 65% of the universal offshore BPO market (Source) and has made India one of the best outsourcing countries in 2020. India is considered to be the major destination for outsourcing and has some of the best outsourcing providers which have been able to evolve with changing needs. Yes, the impact of outsourcing in India in production has been low but higher than any other outsourcing destination. With the ever-changing global market, India continues to be the world’s favorite when it comes to outsourcing. The future of outsourcing in India will get the better of the worlds’ leading outsourcing players because of augmenting access to vast internet penetration, huge remote workforce, superior talent, quality results, and great turnaround times at a low cost.

The future of outsourcing in India

India’s emergence as a global outsourcing hub is a consequence of multinational corporations wanting to eliminate the overhead costs and make use of the highly skilled remote workforce.

As India is leaving behind its brutal past of digitalization, MNCs are finding interest because of vast and remote internet penetration.

The introduction of the government’s Digital India initiative hand-in-hand with the increasing internet penetration over recent years has resulted in the country’s digital population amounting higher than any other developed nation.

Don’t believe me? Check out the below-mentioned statistic supporting this fact.

India has approximately 688 million active internet users, as of January 2020. (Source)

Increasingly, companies have developed a lot of interest in India to outsource their business processes because of an abundance of skilled talent and greater access to the remote workforce, and low labor costs.

Streamline your business processes and cut costs with outsourcing

Industries outsourcing in India

The global outsourcing market is growing and it has become a means for businesses to accelerate innovation and make profits while developing a brand value globally.

India has developed an image of the ‘world outsourcing hub’ over the years by building a stage that makes it attainable for companies looking for outsourcing partners.

In recent times, IT and BPO sectors took the lead and many other industries have realized India as their preferred destination for outsourcing services.

IT Sector

The IT outsourcing industry is the fifth largest in India. The IT sector in India adds extensively to the global outsourcing partners’ market share.

Statista claims that “India is the world’s largest IT services provider.”

Innovation and advancement of technology are increasing in business and IT outsourcing solutions in India encourages companies to gain a competitive edge.

IT services demand expertise in concentrated domains and proper tools. So, the future of IT in India focuses on the training of staff and as well as to develop the infrastructure for the same.

The major IT support services needed by any industry are:

Many companies favor India to outsource these IT services as the Indian software industry has experienced software developers, future-ready infrastructure, and quality work.

BPO/ Virtual Call Centers

Virtual call centers are working as a messiah of a huge business process outsourcing the Indian workforce. As discussed above, due to access to high-speed internet in every remote part of the country, agents can work from their homes without much effort.

This phenomenon has spread like fire in the global outsourcing market. Once again, the BPO industry in India has become popular and a preferred location for companies.

It will mostly remain the same as India has a habit of adjusting to the environment in regard to business.

The future of BPO in India offers a distinct combination of technological advancements and communication with remote internet penetration which motivated companies to outsource their business processes to India, amidst the pandemic.

Since then, the outsourcing market in India has grown in leaps and bounds.

According to a study, by 2024 the BPO services market in India is expected to grow at a CAGR of 7.63%.

Statistics: Research and Markets
From cloud to networking, data center to security, and so on, breadth and depth of capability are essential to recover and restore operations, and position organizations strongly for the coming years.
Back-office outsourcing companies in India have given another edge to their workforce of well-trained professionals to fulfill every possible business need when it comes to outsourcing operations.
According to a survey, the demand for expertise in cloud infrastructure outsourced to service providers is set to increase in 18 months to 77%.
When it comes to the future of outsourcing of IT in India, new product development will be the most common impact on IT decision-making in the next 12 months. (Source)

Knowledge Process Outsourcing (KPO)

KPO involves information-related business activities. Some of the major tasks that require information processing are:

  • Financial and Investment Research
  • Research and Development
  • Data Analysis and Interpretation

To perform these high-end tasks, there is a need to understand the nature of business. It also requires the processing of large volumes of data.

So, it involves a workforce that has advanced degrees and expertise in a specialized area. This will need a high amount of resources and also more time, so we highly recommend you outsource it.

Back Office Support

As technology continues to change, it leads to high outsourcing expenses, and finding a competent workforce is also difficult. Despite this, India manages to stay ahead and it will continue to be like this in the coming years.

“Worlds’ back office rushes to online in India lockdown”. (Source)

With changing advancing technology, the market needs are changing as well. Today, social media is rising at an exponential rate.

Therefore, the necessity for content moderation in order to ensure a safe and secure platform for customers is the need of the hour.

Transaction and complex data processing are also some of the most sought-after back-office processes that businesses look to outsource to India.

Back office Support Service 2

What will be India’s outsourcing strategy?

As the world steps into 2021, key learnings are likely to shape the way organizations approach their outsourcing arrangements in the future.

Aspects of the traditional outsourcing model have been proven to be flawed and organizations now have an opportunity to build more resilient frameworks for crisis management.

Indian outsourcing strategy should ensure that the organization adopts appropriate risk management to enable it to survive black swan events.

Outsourcing in India: The hub of IT Support, Talent & Innovation


Remote working

It seems increasingly convincing that remote working will be in place for the immediate future. This certainty increases the value of top outsourcing companies in India consolidating proper information and data security obligations into their outsourcing methods.

Often, security devices connected with a remote workforce have been centered on physical access. In a remote setting, the focus will be on implementing sensible security mechanisms such as electronic and technical access control to restrict the exfiltration of data to private systems.

Businesses will also be required to have proper devices in order to check the performance of their outsourcing partners’ workforce when physical monitoring is not possible.

In India, leading BPOs will exercise the specific plan which has been and is qualified of being stress-tested frequently, arranging how remote operations will be performed, and how performance risk will be handled when physical surveillance isn’t possible.

Re-visiting outsourcing arrangements

One of the major advantages of outsourcing in India is a skilled and experienced workforce at a lower cost. It includes risk because it cuts the level of control a company might exercise over the remote workforce.

It depends upon seamless communication of fluidity of data and resources. The cost benefits of outsourcing will forever be a major temptation. There is also a focus on supply chain resilience and robustness.

India is anticipated to see a speedup in the investment in the automation of labor-heavy projects to decrease the dependency on human capital.

This effort to automate and ‘bots’ has already been visible among businesses with substantive outsourced services.

Prolonged use of automation in outsourcing may be a chance to bring back on-shore while controlling the cost to a reasonable level.

There is also expected to be promptness in cloud migration given the adaptability that cloud computing allows to scale up and scale down works to cope with external demands.

The multi-sourced model is the new phenomenon

The outsourcing industry is moving away from single-source models for specific critical functions. It will benefit more from multi-sourced vendors in different geographic locations.

Here each and every service provider is capable of replacing one other if they are failing to perform.

However, there are only two advantages of the single-source model:

  • The client negotiates a low overall price.
  • The client has a single point of contractual accountability.

These are considered limitations in the open market economy. The perks of the single-source model struggles in front of the lack of supply chain flexibility.

Re-thinking office administration and control structures

Effective office administration policies and mechanisms are often essential to the successful implementation and execution of outsourced methods.

These policies rely on having co-working spaces, face-to-face meetings, or in the case of remote workforces, the constant presence of the employees at the office of its service provider and vice-versa.

Businesses will have to find out a way that conventional office administration models that can efficiently work in a remote setting.

Businesses have to find out a middle path between loosening the rules, and completely removing administration and control.

It would be an advantage for the best outsourcing companies in India to have tiered office administrative policies and controls that are flexible to the circumstances. It has to be predetermined and tested in a remote working environment.

Increased crisis planning

Outsourcing leaders in India concentrate on crisis management. They are making themselves flexible in the context of ‘worst-case scenarios’ in the future.

In order to tackle the unstable productivity commitments and pricing structure, Indian outsourcing businesses are focusing on hard-coded outsourcing arrangements, performance clarity, and price expectations.

They will be able to pull off large-scale outsourcing projects even in a crisis. Before the pandemic, contingency planning was considered as a USP (Unique Selling Proposition).

This is more relevant today and those with better crisis management will win the race.

India as an outsourcing destination is predicted to see a sound and sustained market for the future of outsourcing in India with respect to its services in the long run as part of accelerated digital transformation exercises within the country.

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