Outsourcing to India is one of the most popular management practices today. Though it is generally overdriven by the cost reduction factor, this is just one of the reasons one should consider while evaluating outsourcing. More and more global companies are choosing to outsource today for a number of reasons, such as, cost-effective services, increased efficiency, increased productivity, shared risks, reduced operating costs, increased quality, better services and more time to focus on core competencies. These are just a few of the reasons why organizations are outsourcing today.

Business segments typically outsourced include accounting, information technology, human resources, facilities and engineering. Many companies also outsource customer support and call center functions like telemarketing, customer service, market research, manufacturing, designing, web development and content writing.

Major fortune 500 companies like GE, American Express, Ford, Citibank, certified public accounting firms are all outsourcing to India. It is also increasingly being adopted by small and medium size business across diversified industries.

Why outsource to India:

India has been a pioneer in providing outsourcing solutions and has been providing a range of outsourcing services to countries across the globe. Today, India can be called as the world’s outsourcing hub.

The following are a list of reasons why companies outsource to India.

• Substantial costs savings: Savings anywhere between 30%-50%.
• India has the largest well-educated English-speaking workforce.
• Access to economical but skilled labour force in India- Per agent cost is around 1/8th of that in USA & Canada, and 1/6th of that in Europe.
• Favorable political and business environment for outsourcing- India is the most renowned outsourcing destination in the world.
• Considerable technological and infrastructure upgrades in recent times in India.
• Advantageous time zone difference between US and India ensures high productivity and faster turnaround times.
• Service providers with well established processes, experience across multiple domains, mature technology platforms and skilled resource base.

Key Observations

• A recent study claims Global outsourcing market to be worth $1,430 bn by 2009.
• India tops the list of most favored outsourcing destination. India holds a 60 per cent global outsourcing market share.
• World Bank-funded study in the United States confirmed that vendors rated India as the preferred outsourcing destination. 82 percent of U.S. companies ranked India as their first choice for outsourcing
• India provides solutions across all the outsourcing areas-finance and accounting, IT, customer support, HR, marketing support, and supply chain among others
• Most of the large BPO companies in the world are either based out of India or have a major office in India
• Indian service providers are consistently ranked among the best service providers by industry surveys