outsourcing-an indian perspective

7/28/2019 Outsourcing-An Indian perspective

1/17

OUTSOURCING- AN INDIANPERSPECTIVE

AUTHOR: V. SRIPRIYA, LecturerDepartment of Management SciencesPSG College of Arts & Science.Co-author: M. DEVISHREE, StudentDepartment of Management SciencesPSG College of Arts & Science.


2/17

OUTSOURCING ?

Contracting with another company or personto do a particular function which is considered

non-core to the business.

Outside firms that are providing the outsourcing services are

third-party providers, or service

providers.


3/17

FACTORS

Heavy workload Lack of time or urgency

Lack of expertise

Shift to new technologies

Return the focus of staff

Increase service levels

Reduce capital costs

Cut recurring operational costs

Enable business tactics


4/17

OUTSOURCING CATEGORIES

BPO - BPO (Business Process Outsourcing), a particular processtask is outsourced.

KPO - KPO or Knowledge Process Outsourcing typically calls forwork that needs higher levels of involvement from the worker.

ITO - ITO or Information Technology Outsourcing is another major

category that requires sophisticated, quick responding computer

systems and software.


5/17

Advantages of Outsourcing

Concentrate on core business processes

High-quality services

Save on time, effort, manpower, operating costs and

training costs

Saves on capital expenditures

Sharing business risks is possible

Reduce investment risk

Overcome human resource crunch.


6/17

Disadvantages of outsourcing

Loss of Managerial Control

Threat to security and confidentiality in outsourcing

Loss control and expertise over the process that is

outsourced

Hidden costs may be involved

With outsourcing, organization might suffer from a

lack of customer focus

Other disadvantages are renewing contracts,

misunderstanding of the contract, lack of communication,

poor quality and delayed services


7/17

OFFSHORE OUTSOURCING

(Global sourcing or Global delivery)

GLOBAL OUTSOURCING

Creates and expands new markets

Effectively and efficiently promotes global citizenship

Recognizes the benefits of a global economy

Enhances technological creativity and diversity

Makes good social, financial, and economic sense


8/17

OUTSOURCING

DESTINATIONS

MAIN

DESTINATIONS

UPCOMING

DESTINATIONSOTHERS

OUTSOURCING DESTINATIONS


9/17

The countries have been compared on parameters such as

total size, average IT employee costs, total workforce,

number of quality certifications, main clients and other

considerations.

MAIN DESTINATIONS


10/17

INDIA Quality work, English speaking Indians, Low

labour costs.

IRELAND Favorable taxes and Infrastructures,

Good education system.

ISRAEL Extremely skilled programming work force.

CANADA Favorable business climate, comprehensible

legal system.

PHILIPPINES Low average employee costs, Good education

system.

SOUTH AFRICA IT manpower to serve global markets.


11/17

UPCOMING DESTINATIONS

Ukraine- Challenges of economic transition.

Czech Republic- Relatively low costs, strong education

system.

Poland- Low cost, govt working hard to promote IT sector.

China- Govt taking lot of initiatives to boost the IT sector.

Pakistan- Scalability, Reliability and Low cost environment.

Argentina- Low costs, large labour pool, solid base ofengineering talent.

Brazil- Cheap and efficient

labour.


12/17

INDIAN SCENARIO

The early and mid 1990s that saw the emergence of outsourcing. First outsourced services was medical transcription.

Data processing, medical billing, and customer support began

towards the end of the 1990s .

The ITES/BPO market expanded its base with the entry of Indian

IT companies. National Association of Software and Service Companies (NASSCOM)

have created platforms for the dissemination of knowledge and research.

NASSCOM acts as an 'advisor, consultant and coordinating body' for the

ITES/BPO industry and liaisons between the central and state government

committees and the industry.

India's competitive advantage lies in its ability to provide huge cost

savings thereby enabling productivity gains and this has given India

an edge in the global ITES/BPO marketplace.


13/17


14/17

Likely Future trends worldwide

Outsourcing expenditure will continue to rise. Outsourcing attractive, creating a multi-polar world .

outsourcing will create stability .

The rising price of oil will cause oil consuming countries

like the USA to be less competitive resulting in more

outsourcing to India and China.

India will show excellence in Services that require advanced

English like Research and Analysis Outsourcing, Content and

Medicine.

Political backlash over outsourcing is likely to lessen

over time .

Technological power will shift from the West to the East .

Vendor focus will shift from basic skills, costs and processes

to domain knowledge, transition challenges, change

management, HR issues and governance.


15/17

CONCLUSIONOutsourcing is undergoing a radical transformation . The industry is rapidly growing and maturing and India

has established itself as a major outsourcing hub.

China seems to be the only nation having the capabilities

of becoming a competitor to India.

So in the future there are high changes that China can

become the major destination for outsourcing .

The Indian government must involve in improving the

infrastructure and also implement some investor friendly

laws to safeguard its place in outsourcing industry.


16/17

REFERENCES

outsourceportfolio.com/trends-offshore-outsourcing www.cio.com/article/511237/10_Outsourcing_Trends_to_Watch_in_2010

www.outsource2india.com/why_india/articles

www.itmatchonline.com/itoutsourcing_trends.php

www.sourcingline.com/outsourcing-location/india

www.offshoreitoutsourcing.com/Pages/outsourcing_statistics.asp

www.plunkettresearch.com/Industries/OutsourcingOffshoring/

OutsourcingOffshoringStatistics/tabid/182/Default.aspx

Times of India various issues


17/17

outsourcing-an indian perspective

Documents