Captive off shoring India has become synonymous as the favorite outsourcing destinations and the fact cannot be denied that it has been offering cheap labor combined with efficient and quality output. In the same way it has also become a favorite destination for captive use by the multinational companies. Captive off shoring refers to the off shoring without the IT and business services. In other words the software development, back office data processing, IT support, call centre operations or business process outsourcing is wholly owned by the company and the activities are performed off shore with no scope for outsourcing to any company. There are about half the US companies in India with predominantly the financial services and the software firms with captive centres and according to the researches done there are as many as 500 captive centres in India alone right now out of which many companies again had one or more capitve centres. However the captive centres further are divided according to their industry verticals like Financial services, IT/ Software services, Hi Technology, Retail, Telecom, Aviation, Industrial goods, consumer durables and electronics. The reason why we have had US as the clear leader and their dominance was clearly seen because the US IT firms have out numbered the European firms and relatively a very high percentage of US firms have set up their captive firms. According to market research the captive firms have undoubtedly helped in saving an average of anything from 20% to 70% with the noted advantages like English speaking capabilities, very economic work force, efficient and quality output. However, one cannot ignore the fact that captive firms don't hold any great track records . Working with the service provider and the third party provider has always proved to be advantageous and so doubts have been raised if the captive centres will continue to develop. Setting up a captive centre is definitely a difficult and tedious proposition as it comes with a lag of a year or a year and a half to finish deals regarding the infrastructure. Then starts the recruitment processes which again takes a couple of months. According to Nasscom, since 2004 the captive off shoring attained significant growth to about 30 percent approximately to more or less same percentage as the Indian off shore markets. It also had a significant raise in the following years. A mix of both captive off shoring and third party outsourcers have proved very successful in the recent years as people like to work with big brands Fidelity, Citibank, HP, Accenture, JP Morgan etc.
There has been a lot captive centres in India and they have been steadily increasing with head counts doubling in the recent years. However, in reality the merits and demerits in the captive off shoring are like the two faces of the same coin. The pros and cons are always witnessed in general. At the end of the day it depends on the organisation as to how it perceives captive off shoring. However in certain instances even if the firms want to outsource, third party outsourcers may not have the efficacy, henceforth they might have to adapt the captive route.