The foundation of successful software outsourcing relationship is laid when an organization communicates to the potential suppliers about its intention to outsource business functions. Outsourcing is not just a contract signed between two parties but is largely emerging as a relationship managed from day one of the contract. Successful outsourcing relationship requires a lot of professionalism and good management. Managing outsourcing relationships requires constant attention and an expectation of continuous improvement and proactive approach towards achieving it. The company's ability in managing their outsourcing relationship will determine its business success.
India is an ideal offshore destination due to various cutting edge advantages it has over other countries. Let's make a closer look at the factors highlighting the potentials of IT outsourcing to India:
Government Policies, Skilled Talent Pool, Indian Education System….
India, the hottest destination today for Offshore IT Outsourcing beats the other destinations with its unique strengths.
1.1 Government Policies
- Setting up of specific commerce zones including the Software Technology Parks
- Making the existing laws more liberal
- Giving tax exemption for exporting IT enabled software outsourcing services
- Deregulation & liberalization policies
- Removed restrictions on investment and made the process of investment easier
- Enactment of Cyber Legislation
- Working on a stronger data protection and privacy law in association with NASSCOM
- The liberalization and deregulation initiatives taken by the government are aimed at supporting growth & integration with the global economy. These reforms have enabled the entry of foreign companies to the Indian market. FDI investment from NRI's including Overseas Corporate Bodies (OCB's); owned by the NRI's are warmly welcomed in India.
- A separate Ministry of Information Technology was set up to expedite swift approval and implementation of IT projects and to streamline the regulatory process " Reduced licensing requirements to make foreign technology accessible.
- All policies are custom made, keeping in mind the need to achieve maximum benefit to the outsourcing industry
- Having recognized the potential of IT-enabled services, the Government of India has taken positive steps by providing numerous incentives. It has established a task force for developing world class knowledge based outsourcing industry allowing duty free imports of capital goods and providing tax exemption on export of IT enabled services.
1.2 Skilled Talent Pool
India has a large base of highly talented, qualified and easily available human resource in the field of Information Technology. Adding to this, India has the largest English speaking population amongst the developing countries.
1.3 Indian Education System
India has one of the most advanced and developed educational systems in the world. The educational system is modeled to nurture analytical and scientific talent.
The Indian school education system places great emphasis on mathematics and science, resulting in a large number of sciences and engineering graduates. The English medium of education also helps in nurturing top class English speaking resource.
1.4 Time Zone
India is located at a 12 hour time difference with North America that facilitates the American organizations to achieve a 24*7 business operations and customer service.
In the past few years, the Indian IT industry has pursued the goal of attaining the highest international standards of quality.
ndian players have created a strong value proposition in the IT software and services arena. India enjoys advantages of sophistication in terms of a very large pool of English speaking scientific personnel, varied and extensive skill sets in terms of technology, and offering services at globally competitive costs. Today, the world looks towards the Indian IT software and services industry for its good quality and high price performance.
The Indian companies involved in software outsourcing provide high quality work, meeting international standards and complying with the ISO & SEI-CMM standards. Three out of every four SEI-CMM 5 companies worldwide is located in India. Thus India promises quality - IT outsourcing in India as it has the potential to furnish these services perfectly. Indians are increasingly adapting to international quality standards.
Infrastructure that is of importance in the IT industry includes telecommunications, electricity, access to computers, number of Internet hosts, number of ISP's and available bandwidth and broadband access.
Software Technology Parks of India offer world-class infrastructure and various incentives and concessions to encourage foreign investment and promote software development in India e.g. 100% foreign equity is permitted and approved under the Automatic Route delegated powers to The Director STPI, tax holiday until 2010, etc.
Communications is one of the critical infrastructure requirements of a country. India, with its one billion people, over 500 districts, around 5,000 villages and large metropolitan cities having population equivalent to that of many countries needs an extensive infrastructure to serve such a population.
Excellent telecom, ISP, and cellular networks are available in all cities & towns in the country. India prides in the reliable satellite and submarine communication links that facilitate good band connectivity with the rest of the world. Thus companies engaged in IT outsourcing to India, can be in touch with the vendors without any connection hurdles. This plays a significant role in determining the success of offshore outsourcing to India.
Telecom bandwidth issues have also been addressed. Many private ISPs have come in this sector and telecom costs have dropped.
Power availability has also improved dramatically and has become more consistent throughout the country.
4. Competitive Cost
A substantial cost saving can be achieved by IT outsourcing to India, owing to the yawning gap between the labour costs in India and that of the developed countries. Studies and analysis suggests that outsourcing business to India saves as much as 70%. Corporate giants in the United States, Europe, and Japan prefer India for cost-effective and high-quality software solutions.
The relatively low cost of manpower makes India, a highly sought after destination for sourcing cross-border IT-enabled services. India provides maximum number of software engineers to Silicon Valley, West Europe and the Asia Pacific IT industry. The country is moving towards next generation telecommunication technologies.
5. Knowledge Professionals
Being a talent rich country, India offers the fastest growing pool of expertise that is computer literate. The rich resource of educated customer care professionals is proficient in the English language.
India is proud of the abundance of its highly qualified and technically skilled English speaking computer professionals, who are key to success in the field of IT outsourcing to India.
Hence, outsource to India for technological agility, quality, flexibility, cost control, time-to-market and competitive advantage.