In a recent survey, 80% of European and US outsourcing firms ranked India as their number one outsourcing destination. (NASSCOM) also reported that almost half of all Fortune 500 companies choose to outsource software development to Indian outsourcing firms.
Even though many other countries (including China, Mexico, Ireland and the Philippines) have emerged as major competitors, India has managed to outmaneuver all others and emerge as the top outsourcing destination. India’s offshoring business, at about USD 118 billion, is considerably larger than Philippines which is just aroundUSD 15 billion (Source: Hexagon consulting), which clearly shows that global clients consider offshoring to India a better alternative.
Major differentiators such as certain favorable government policies, fast-developing infrastructure, and an immensely talented work force are responsible for the Indian IT outsourcing industry continuing to experience a tremendous growth rate of 25–30 % per year. Read on to find out more about why India remains the ultimate outsourcing destination.
1. India has the largest technical and professional talent pool in the world.
India remains unmatched when it comes to its vast pool of skilled and talented human resources. The country has a population of over 1.2 billion people and around 3.1 million graduates are added to the workforce each year. India also holds the distinction of being the largest English-speaking nation in the world, larger even than the US and UK combined. Apart from the vast numbers, is the quality of talent that attracts companies wishing to outsource. “The attraction of India for us was not only numbers but, more importantly, the quality of the
talent. We’ve taken on people who are innovative and creative and can really contribute to the business,” says Tom Hyde, STI Upstream business manager (Shell), on why their company choose India among other countries for their outsourcing needs.
2. India offers flexible pricing options.
The number one reason why India remains a top outsourcing provider is due to the significant cost savings that companies can achieve. This is mainly because of the wide gap that exists between personnel costs in India and that of the developed countries. For example, a good
developer in the U.S. can cost anywhere from $50 to $80 an hour (for a full-time staffer depending on skills and experience). In comparison, the hourly cost of a developer in India can be negotiated down to as low as $15 per hour. This pricing flexibility allows companies the freedom and creativity in managing their budget and helps them reap large profits.
3. India provides consistent high-quality services.
While the cost factor plays a huge role in outsourcing, the consistently high quality provided by Indian outsourcing firms have also enabled India to remain as the top outsourcing destination. The National Outsourcing Association (NOA), in its Annual Offshore Outsourcing Conference, reflected on the trend commonly seen among International companies who choose India as their preferred outsourcing destination. “Cost reduction was only one part of the reason that companies were considering offshore outsourcing, there were benefits to be had in time-to- market and quality, leading to an adage that companies initially chose India to save costs but stayed for the speed and quality!”
4. India boasts of the best in Infrastructure and technological capabilities.
Modern India is well-developed and offers state-of- the-art telecom, ISP, and cellular networks in all major cities and towns. Clients are offered the latest and best in software technology, including customized solutions for various applications such as e-commerce, business process re-engineering, system migration, legacy system maintenance, system integration, and much more. Outsourcing companies also maintain uninterrupted communication channels with clients by providing high-speed bandwidth via satellite connectivity, submarine cables and fiber optic networks.
5. The Indian Government is stable and offers attractive IT policies.
The Indian outsourcing industry is supported by a stable pro-IT government whose policies on the economy, GDP growth, taxation, power, telecom, industrial parks and special zones have been helpful in improving infrastructure as well as communications systems. IT is regarded as one of the top 5 priority industries in India, and the government has framed policies to obtain maximum benefit from IT outsourcing to India. The government has offered its support to the IT industry by providing various tax-related and other benefits and by enacting the Information Technology Act, which recognizes electronic contracts, bars cybercrime and supports e-filing of documents. To promote software development in India, the Indian Government has permitted and approved 100% foreign equity. The Government of India has also encouraged Indian software technology parks to offer incentives and concessions to foreign investors.
6. Indian companies provide the quickest time-to- market.
Indian outsourcing companies are able to provide the quickest time-to- market due to the advantages gained by time zone differences. The 12-hour time difference between India and the USA provides companies with numerous opportunities for work to be completed earlier
than expected, leading to greater efficiency, increased productivity and more time to focus on other crucial tasks. The time difference makes India an ideal option for clients who wish to outsource various service-related options, such as 24X7 Customer Support and Helpdesk
7. India—the most preferred global outsourcing destination.
India continues to remain the world’s favorite when it comes to outsourcing. It has gained global confidence with major players such as Cisco, Oracle and Hewlett-Packard opting for India because they are confident of gaining access to superior talent, quality results, fast turnaround times and low costs. Mr. Elfrink, (Cisco Systems), reiterates this point when he says, “We believe that India is the hub of the world where the ICT sector is concerned.” India also holds 65% of the global offshore outsourcing BPO market, making it the dominant leader in providing outsourcing services.