The Growth of Outsourcing in India

Outsourcing has become one of the top trends in the business world regardless of industry. The question on everybody’s mind at this point is until when will this trend continue? India, which is one of the countries that has benefited immensely from the growth of outsourcing along with the Philippines, has transformed itself as a major hub. With the constantly changing global business dynamics, what does the future hold for the growth of outsourcing in India?

The Role of India

As a major outsourcing destination, India has successfully evolved with the changing needs of businesses. The National Association of Software & Service Companies (NASSCOM) has reported that the share of India in the global outsourcing market actually rose in 2009 to 2010, from 51% to 55% respectively.

India’s biggest competitor is the Philippines particularly in front of house outsourcing.

Despite competition from its neighbors and other parts of the world, the future of outsourcing in India still looks bright because of its high level of customer service and efficiency. By responding to the needs of customers for cost-effective solutions, skilled staff, quality of service, enhanced productivity, and excellence of business process, India has entrenched itself as a major outsourcing player in the global market.

The large and multi-skilled population is another factor to consider why front-end and back-end outsourcing growth is predicted to continue in the country.

Cost Savings Advantage

No matter how you look at it, cost savings will remain as one of the major advantages presented by outsourcing. The reduction of overall expenses through the payment of lower amount to offshore outsourcing partners made it possible to lower overhead.

As early as the late 1990s there were predictions that cost savings would no longer be seen as an advantage, yet, today, it remains as one of the moving factors that fuels the outsourcing industry. When we look at the financial problems faced by companies during the 2008 to 2009 economic crisis, we see that cost savings has even moved to the limelight. Until today, it remains as one of the reasons for the growth of outsourcing in India.

Focus on Core Activities

Aside from the cost savings, businesses today are turning to outsourcing even for their core business functions. This can be seen with many SMEs that find it difficult to maintain their own IT departments. The goal is not only to save money, but also to ensure high quality solutions through the use of skilled and experienced specialists from outsourcing partners.

This is one of the reasons why IT outsourcing in particular is on the rise in India. There is an abundance of highly qualified professionals that can achieve excellent results using their skills and resources through proven methodologies.

Standardized Solutions

The future of outsourcing in India will also be influenced by the standardization of outsourcing solutions. These types of solutions are more favorable to companies because they are more affordable compared to customized ones. Those who are looking to maximize their budgets can benefit from this through the acquisition of new customers and better business concepts.

In India, this has resulted in the adoption of non-strategic processes that has kept the costs down. The introduction of mass automation tools has resulted in more opportunities while reducing the staffing requirements needed to support business critical applications.

Supporting Smaller Projects

One important benefit that will remain for a good number of years would be the support of outsourcing for smaller projects. This will result in the emergence of smaller players ready to deliver flexible and specialized solutions that support new business concepts.

This means that outsourcing will no longer be confined to businesses, but can also be offered to individuals that are in need of support. This will help support smaller projects that are geared towards strengthening or resurrecting businesses that have been hit hard by failing economies. The surge in smaller services for first-time buyers will contribute to the growth of outsourcing in India.

Exponential Growth

How can exponential growth be achieved? One of the solutions that industry experts are looking at is the merger of outsourcing and Cloud solutions. This is seen as a way of delivering better opportunities for the entire industry. By taking advantage of the Cloud, more flexibility, cost savings, and scalability can be achieved.

The merger will also support the migration of existing services and infrastructure so that it can become Cloud enabled. This can pose a major advantage for smaller players in the outsourcing industry.

Indian Outsourcing Opportunities

To say that the growth of the outsourcing industry in India has been phenomenal would be an understatement. Compared to its neighbors, India remains as one of the favored destination in the global market by companies that are seeking knowledge-intensive services.

It would not be impossible to think that outsourcing may just be the biggest revenue generating industry in the country. Maximizing its pool of skilled workforce, India continues to strengthen its position in the outsourcing industry.

The country does not have problem delivering solutions for service that need advanced English capabilities like in the case of Content and Medicine or Knowledge Process Outsourcing (KPO). By continuing to excel in such fields it would not be impossible for India to become the global knowledge service hub in a couple of years.

What else plays to India’s advantage? It has a huge pool of English speaking lawyers who can extend their legal expertise in the form of patent services and legal support among others. Some companies in India that are affiliated with legal firms in the United States have successfully captured as significant part of the American legal market.

Another thing to consider in the growth of outsourcing in India is that many of the Fortune 500 companies have already established outsource partners in the country. IBM, TCS, and ACS are just a few examples. Pharmaceutical companies will also find able support in the field of manufacturing and clinical research. There is ample talent in the country to pursue high quality trials and data management that can provide the competitive edge for pharmaceuticals. Major Indian pharmaceutical companies have also started establishing ties with International pharmaceutical firms to manufacture specific compounds.

Infrastructure Management Services, which covers a wide number of management services for application operations, security and maintenance, and IT infrastructure can also be delivered by India. The country is also seen as evolving to a dominant player in the field of Engineering Research and Development. This will mean an expected influx of roughly $1.4 trillion come 2020.

With all of these considered, there is much hope and stability expected in the growth of outsourcing in India.