Thoughts on Outsourcing Scenario in Recession
Outsourcing: India and Outsourcing has always been in the spotlight as the well debatable topic in the recent years for being the favorite destination for outsourcing firms. Especially during the recessionary times with every business trying to optimize the available resources outsourcing stands out to be a very promising factor that would lead to sustaining profitability. It not only contributes as a strategic tool that cuts costs but also favors the steady growth of businesses. Cost being the main driver, outsourcing and off shoring business have bulk savings along with other umpteen advantages: • • • •
The estimate potential savings of the companies are done without compromising on the efficiency and effectiveness. Certainty of cost is better assured when outsourced and is the best solution which helps companies in budgeting the annual fee. It is hiring skills that are not core to the company than just sending low skilled work to a low waging economy. With better infrastructure in terms of communication India has no doubt become the most reliable and attractive business destination for outsourcing.
Challenges for 2009 Though the current global recession becomes an instigating factor to continue innovation and streamline our cost structures to remain competitive in view of the increased global competition to India. • • • • • • • •
Especially in the first half of this year there has hardly been any remarkable growth in the industry due to the global recession. It has become a challenge for the industry to change and emphasize its outlook from revenues to profit margins in order to maintain sustainability. Increasing the productivity level remains as one of the main challenges in 2009. The negotiation with the client regarding pricing also bears optimum challenge which acts as a blow to the revenues as well as the profitability. The ability to pull up billing rates could confront pressure. Neck throat competition is seen in the industry in order to stabilize their stand as the major global players. Strong client relationship has become the order of the day in order, considering the economic fluctuations in the market. The job market also poses a serious challenge.
Why India the most attractive destination for Outsourcing despite recession? India has always been the most talked about power house catering to the needs of the global players. No doubt, India is a complete solution provider with its effectiveness and efficiency in terms of quality, flexibility, cost – effectiveness and technical ability.
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With the abundant and talented resource both in the field of technology and English-speaking workforce. India also has a very large number of training institutes of International repute which focuses not only at honing the resources but also proficient in various domains. India offers the services with maturity and world class solutions. Information technology has maintained its place as the top priority of the Government. Ecommerce is brought within the purviews of laws and accords stringent punishment to “ cyber crimes” India being an expertise in International and systems, has given ample scope for the Indian professionals to provide a global outlook in various international methodologies and processes. We have strongly adhered to the International standards of quality. India being adept at working with people from diverse cultures and background paves way to understand International affairs and diverse culture In order to build an atmosphere of goodwill and harmony India is a member of prestigious international and regional associations including UN,IMF,WTO.ASEAN,SAARC. India offers a stable and economic growth and is one of the world’s fastest growing economies.
Forecast by Gartner •
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According to Gartner India's share of the market is set to double between 2008 and 2010, citing demand for cheaper options during a global recession as India is a low cost high quality outsourcing destination. India still remains an attractive destination for new BPOs to start operations with easy regulatory norms and cost advantage, according to analyst firm Gartner. Indian BPO providers are swiftly evolving to balance exposure to vertical industries, currency and legislation issues. "It's highly likely that many new competitors will emerge from India during the next few years. Contact centres and analytics services will likely see the highest growth," Cathy Tornbohm, research vicepresident at Gartner, said.
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Indian BPO providers are swiftly evolving to balance exposure to vertical industries, currency and legislation issues," Gartner's senior research analyst Arup Roy said. "Their strategies include investing in onshore and nearshore delivery, and pioneering new area of analytics services or knowledge process outsourcing (KPO), where Indian BPO players are shining," he added.
The off shoring delivery model is very well established in the Indian Industry along with its positive chance to increase drastically in the coming years. The new non English speaking clients will choose India as it is the most attractive destination for outsourcing.