Friday, July 07, 2006

Offshore Outsourcing Central

Outsourcing today has become a global phenomenon, integral to the strategy of every major organization and company. Global outsourcing enables companies to outsource tasks using the best possible resources available globally at the most cost effective prices. Even though outsourcing is by no means a recent phenomenon, this practice has become increasingly prevalent in the IT and software industry in recent years. This has been brought about because of the advent and ubiquity of the Internet and major developments in the communication infrastructure worldwide. Almost all major global corporations and even a large number of small to medium sized industries have adopted outsourcing of IT and IT enabled services and realized the benefits in a short period of time. Offshore software outsourcing offers companies several benefits – outsourcing non-core activities enables companies to focus their resources on their core competencies and it enables them to take advantage of significant cost savings over a long term
India has been at the forefront of this revolution from the start and today enjoys the enviable reputation of being the favorite destination for offshore outsourcing of IT services, software development and business processes. Even though China, Philippines, Ukraine, Romania etc are emerging as alternative destinations for offshore software outsourcing of IT services, India today is clearly the dominant player. Several factors contribute to India’s current position – a large pool of English speaking technical professionals; low costs associated with the technical talent in India; and a political climate which encourages stability, security and the economic growth (the right ingredients for attracting international investors and global companies). However, India is no longer simply about providing low cost software development and business process services. Even though significant cost benefits is a major factor contributing to the value proposition of offshore software outsourcing, Indian companies have moved up the value chain to now provide services requiring a higher degree of domain expertise and knowledge capital. As an example, along with IT and IT enabled services, companies in India are now providing services in the areas of business consulting and investment research to top global consulting companies and investment banks.
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