Tuesday, June 07, 2005

Saving grace in offshore outsourcing

Bangalore, June 7 (PTI): Outsourcing IT, IT-enabled services (ITeS) and business process (BPO) work to India has helped firms achieve cost savings anywhere between 40 per cent and 50 per cent, according to the National Association of Software and Service Companies (Nasscom).
In an analysis on ITeS-BPO industry released at a summit here, Nasscom noted that companies were also able to generate higher free cash flows due to reduced investments in physical infrastructure, telecom and equipment.
Wage arbitrage has also led to higher cost savings for companies which have opted for offshore outsourcing, the industry body said in the report.
It pointed out that the need to focus on core competencies to remain competitive has been driving more companies to offshore outsourcing.
offshore outsourcing helps free up resources and help higher management focus on core business requirements. offshore outsourcing also allows for access to new technologies and talent to help strengthen business offerings,” Nasscom said.