Thursday, December 28, 2006

Offshore Outsourcing to India: Quick Decision without Second Thought

Globalization & Internet has taken hold of world leaving no distance between far-flung nations. At this time, Offshore Outsourcing entered the scene with a big boom & has become one of the most important management practices today. Many foreign corporations like American started outsourcing their blue collared jobs including information technology development and IT “back-office” projects to developing nations, like India, China, Philippines & many others. Providing low-cost services & high quality, these nations are developing with a great leap in economy through outsourcing. But, why India is preferred by American & other foreign corporations?

Offshore outsourcing takes account of a great deal of thought. Rapid cost reduction should not be the only drive to outsourcing. Quality solutions & services by Indian companies are credited for being the new attraction for offshore outsourcing to India. When processes are offshored to India, companies not only get the advantage of low cost but also experience value addition i.e. productivity and quality.

Source countries get approx. 40-50% savings from outsourcing to India. However, one should think twice before outsourcing because outsourcing would require a dedicated relationship and a proper understanding between the parties involved which simply means, point of saving money is firm at its stand, but one has to realize that lack of proper communication may cause relapse of the promise of cost reduction.

Other than savings & value addition, immense creativity, speed, scalability & talent of Indian mind also tend to startle the outsourcer once offshore outsourcing relationship starts. This is what we can analyze from this quote;

"Certainly cost reduction, but it's not as simple as that! Cost reduction was only 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!"

Now, when we are discussing potential reasons, then India’s powerful workforce with largest pool of latest technical skills can’t be spared mentioning. Indian companies understand that cost alone can’t continue to keep India’s present dominant position in the offshore Outsourcing Industry.

In short, India is preferred to other countries because of;
•High-quality brain power
•State-of-the-art technology with world-class systems
•One of fastest growing economies
•Rich in resources
•Stable government
•Privatization of the infrastructure sector

Concluding with few words, I would say that rising Offshore Outsourcing is fueled by an amazing combination of efficiencies and profits required by producers of goods and services together with the consumer-driven passion for quality goods at affordable prices. Cost-effective production of quality goods and services becomes the elementary driver for the source country while development of a globalized service-based economy for the destination country. The improving economy is based on highly sought-after skills and delivering services using low-cost broadband communications as the primary mode of transport.

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