The outsourcing industry in India not only has one of the largest job markets, but also the most sought after by the world’s biggest brands. By contracting out a few business processes to a third-party, a business can focus on the core activities. This solves capacity issues, enhance the quality of service, and also helps in managing the business environment. Outsourcing to India was initially a choice solely to reduce costs. Now, the increase in competition, the ability to be innovative and agile, and the availability of talent are important factors why businesses choose outsourcing in India over other countries.
According to Gartner, the worldwide IT services market grew around 6.7% in U.S. dollars in 2018 as the demand across the IT services industry continued to shift toward digital, powered by cloud and automation-based solutions.
It also states that the outsourcing market will reach up to $220 billion by the end of 2020. The steady growth of the IT industry is clear in the upcoming years as businesses need operational flexibility.
The 2019 GSLI overall country rankings indicate that, at a regional level, Asia continues to dominate the Index. India, China, and Malaysia hold the first three spots in the global services value chain again this year—despite the change in the Index methodology.
According to the rankings, while most of the locations have seen changes in their rankings due to intense competition, the top three countries have held the same position since the measuring of attractiveness for locations started.
India is an undisputed leader in the outsourcing industry. It offers a wide range of English-speaking skilled labor that no other low-cost countries can match. According to A.T. Kearney, in March 2018, India was hosting more than 1,140 global in-house captive centers, which allow almost half of the top 500 global companies to work in India.
There have been continuous developments within the sector. One such development is the NASSCOM’S online platform for upskilling more than 2 million tech workers and educating 2 million others who are willing to learn to do this work. There are more than 1000 delivery centers established by Indian IT and ITES companies in approximately 80 different countries.
About 75 percent of global digital talent resides in the country.
As technology in business is a growing necessity, IT outsourcing helps businesses gain a competitive advantage. IT services require expertise in specialized fields and proper equipment. So, there is a need to train the employees and also to set up the infrastructure for the same. This process can be expensive and also time-consuming.
The important IT support services required by any industry are:
Many businesses prefer to outsource these services to India as the Indian software industry has skilled software developers and is infrastructure ready.
The Indian software industry has the ready infrastructure, specialized knowledge, and skilled software developers for the job. Also, since many of the Indian companies have been providing these services for decades, there is no need to worry about the quality of work.
KPO involves the outsourcing of core, information-related business activities.
Some of the key tasks that require information processing are:
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 who have advanced degrees and expertise in a specialized area. As it requires a high amount of resources and also time, it is best to outsource.
Technology has been playing a major role in our lives. Social media platforms are also growing at an exponential rate. So, the need for content moderation and also a need for companies to ensure a safe and secure platform for their customers. Transaction and complex data processing are also some of the most sought after back-office processes that businesses look to outsource.
Some other back-office support services outsourced are:
These processes are outsourced as technology keeps changing continuously which leads to high expenses, and finding qualified labor is also difficult.
Addressing customer needs and concerns is one of the important tasks for businesses. If the queries are addressed on time, it leads to customer loyalty. But answering all the customer calls and replying to their emails is a tedious task and is very time-consuming.
Businesses outsource customer support to third party call centers to attend to their customers’ needs as it is not a fairly technical task. All that is required is a dedicated staff and proper technology to provide uninterrupted support round the clock. Companies can direct their focus on the core business process by outsourcing these services. Due to the time zone difference, cost-effectiveness, and many more advantages, companies choose India as the outsourcing center.
Let us lay it down for you.
Outsourcing in India remains a very attractive proposition to many international businesses. Being an unquestioned leader, along with commercial attractiveness, wide talent pools, and the appropriate business environment, India as an offshore outsourcing destination glows amongst others.
A Deloitte study revealed that over 59% of businesses are already outsourcing in India. Not just that, 22% of those that are not currently outsourcing in India are planning to do the same in the coming times.
With IT hubs in different states like Bangalore, Gurgaon, and Hyderabad, India has proved itself to be a leader when it comes to IT infrastructure. India also has well-developed telecom and cellular networks in many of the cities and towns which allows for a smooth flow of communication.
Infrastructure in India still has room for development, when compared to other countries in terms of cost of operations. This gives an added advantage as the country offers better facilities on the ground.
IT is given high priority in India and the policies on taxation, telecom, etc. have been highly helpful in improving the infrastructure and communications systems. The government has provided various benefits relating to tax by enacting the Information Technology Act which also recognizes electronic contracts, supports the e-filing of documents, and bars cybercrime.
“India has moved 14 places to 63rd among 190 nations in the World Bank’s ease of doing business ranking on the back of multiple economic reforms by the Narendra Modi government.” – India Times.
The country also has a strong network of IT/ITeS promotion bodies and groups with special tax incentives for the Indian outsourcing and BPM industry. The government has also made it easier for BPO employees to work from anywhere in 2020. With removal of the registration requirements and reduction of compliance burden, the 2020 Indian governemnt has allowed BPO employees to work from anywhere permanently.
According to PwC, India has one of the fastest-growing talent pools for IT and ITeS industries. India has a ready talent pool of employees, with the outsourcing industry directly employing over 3 million people along with indirect employment of over 10 million others.
With over 200,000 IT and engineering graduates joining the workforce each year, the talent in India can support businesses across various industries like BFSI, Healthcare, eCommerce, Technology, etc.
Given the time zone differences, Indian outsourcing companies provide the quickest time-to-market. For example, the 12-hour time difference in India and the USA leads to the faster completion of work, which further leads to increased productivity with greater efficiency.
According to a study in 2019, India is ranked 5th among Asian countries for proficiency in English. The country boasts of the second-largest English-speaking population in the world after the USA.
Over the years, Indian outsourcing companies have been providing best-in-class services by adapting to internal and external capabilities. Due to the skills, communication, technology, deliverables, and many more advantages, India is being perceived as the global destination for outsourcing IT services.
People always discuss the advantages of outsourcing in India. But here we have also discussed what are the disadvantages if a company decided to outsource their work to India.
The third-party outsourcing provider may also be involved with other brands and companies, which may involve shared resources. They might not be able to give as much time to a single project. This may result in setbacks and exaggerations in output.
Businesses need to adjust to the social & cultural practices of the outsourcing provider. The difference in time zones, regional culture & language, and dialect causes communication struggles among businesses & service providers.
There are risks to customer’s information and business project data. Once the data is outsourced, businesses have very little control over the data. It involves the risk of exposing classified business information to a third-party.
More than all other advantages of outsourcing to India, that sets the industry apart it is the ability to innovate and persevere in tough times. The Indian digital and technology space is amongst the fastest growing, compared to other South East Asian counterparts. With Google announcing a $10 billion investment fund for advancing digitization in India, it’s only safe to say that this is the space to look out for; be it for outsourcing or any other business opportunity.