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).
Country |
Work Force |
Market Access |
Local Market |
Infrastructure |
Cost |
New Zealand |
2 |
2 |
- |
2 |
2 |
KualaLumpur |
1 |
2 |
- |
2 |
2 |
Japan |
1 |
2 |
1 |
3 |
3 |
Hong Kong |
1 |
2 |
2 |
2 |
2 |
India |
3 |
2 |
2 |
2 |
1 |
1 denotes low; 2 denotes
average; 3 denotes high |
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. |
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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. |
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Cost of qualified personnel is amongst the lowest in the world
. |
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India provides income tax holiday till 2010 for export of
IT-enabled Services. |
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Stable legislative and economic framework. |
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Support of Government of India for all IT-led industries.
|
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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. |
|