Why India for Outsourcing?

India's irresistible and sustainable value proposition

By BPO, overseas companies can not only achieve significant improvements in cost, quality and time but also create platforms for building new businesses. Overall, these benefits are due to the advantages offered by skill-surplus economies. India has currently the best value proposition of all BPO hubs.

India's value proposition is already leading BPO hubs such as Ireland and Singapore to back-end their operations in India, since skilled labor is becoming an increasingly scarce resource in these countries. Seizing the opportunity, several companies in the financial service sector, for example, have saved at least 50-60 percent of their process costs. Additionally, the process redesign that comes with our location provides additional cost savings.

A comparison amongst some countries in Asia Pacific based on these factors highlights the following (ratings are on a scale of 1 to 3, with 1 being the lowest and 3 the highest).

IT-enabled service centers in India are able to deliver superior quality because of specialization and scale benefits. India already has a large and rapidly growing number of IT-enabled service providers collectively covering a wide range of services with different levels of complexity and value added.

Yet another compelling rationale for IT-enabled services is that it allows companies to capitalize on time zone differences and to provide services round-the-clock, every day of the week (24x7 service). For example, doctors in the US can have transcribed records of their notes at the start of the next day by sending them to medical transcription services in India who will start work at the end of their working day in the US.

Finally, companies can discover new business opportunities in the skills they learn from operating IT-enabled services. GE Capital, one of the largest IT-enabled service operators in the financial service arena, is now planning to extend IT services beyond GE group companies to external customers. It is planning to expand its IT-enabled services operation in India to over 10,000 employees. Additionally, there are already a large number of smaller Indian companies that provide services in many areas of the business system.

The sustainability of the value proposition makes it irresistible. India will continue to offer a large talent pool and favorable economics for some time to come. These advantages are buttressed by the significant number of IT-enabled service set-ups in the country that they can learn from.

India Offers Many Advantages

India offers many advantages to serving as an IT-enabled Services destination for major global companies.

These include:

	A virtual 12-hour time zone difference with USA and other major markets for IT-enabled Services.
	A huge pool of English speaking and computer literate graduate manpower, which will continue to cater to the growing demand for professionals for IT- enabled Services. These professionals are skilled as well as quality conscious.
	Cost of qualified personnel is amongst the lowest in the world .
	India provides income tax holiday till 2010 for export of IT-enabled Services.
	Stable legislative and economic framework.
	Support of Government of India for all IT-led industries.
	Zero import duty for software, books, software licenses, hardware, call center equipment, etc.
	Zero income tax on profits from export of software, and IT enabled services (call center, data entry, data processing and data analysis).
	Government of India has announced a special policy for call centers in India.
	Many State Governments in India offer special incentives and infrastructure for setting up IT-enabled Services.
	Thrust by Government of India to make India an IT-driven nation with a focus on services sector where potential for value addition and thus premium is higher.
	India enjoys very strong brand equity in major markets, thanks to its growing and globally competitive software industry.
	More than 185 of Fortune 500 companies already have offshore center in India. Therefore vendors in India are used to dealing with the requirements of an offshore initiative.