Economics/Business India India's Outsourcing Industry Faces New Challenges | India's Outsourcing Industry Faces New Challenges |
| Written by Neeta Lal | |
| Friday, 22 May 2009 | |
|
Page 1 of 2
The global outsourcing industry, once India's near-exclusive preserve, is shifting to other parts of the planet including China, the Philippines, Russia and Eastern Europe, presenting unprecedented challenges to the country that virtually invented the idea. India still controls as much as 65 percent of the industry and derives an estimated US$52 billion in annual revenues from it, employing more than 2 million people in finance, human resources and customer services. R&D operations for information technology in places like Bangalore are some of the most extensive in the world, with as many as 200 of the Fortune 500 companies operating their own research centers, according to the Philippines-based outsourcing website IT2P. The industry, however, is continuing to change dramatically, growing progressively more complex and delving into previously untapped areas and sectors. According to a new report issued this week by the International Association of Outsourcing Professionals, the top 100 outsourcers alone employed more than 3 million people globally, with 22 countries now involved in the industry. And, although much of the English-speaking world perceives outsourcing as a re-trained accent at the other end of a phone line 14,000 kilometers away, discussing how to mend a recalcitrant computer, or as back-shop operations like accounting, multinationals are setting up R& D centers in other parts of the world, investing hundreds of millions of dollars in their own captive units to develop patents, taking on ever-more complex operations design and marketing of commercial products and shipping those products to other parts of the world for interlinked development. Until a couple of years ago, India's extensive talent pool, cheaper labor costs and no-holds-barred government promotion policy made the country the undisputed leader, with the government basically reorienting the country's professional education systems to suit the industry's requirements. It also worked towards strengthening the country's talent pool and making educated youth employable. However, despite the importance accorded to the BPO industry – which had been growing at a scorching 35 percent annually, it has lately been losing some of its sheen as the world's favorite back office. Growth has tapered off to 10 per cent this year and most Indian companies are finding their market share eroded by countries like China, Philippines, Russia and Eastern Europe. The outsourcing advisory firm Tholons predicts that while India's industry will continue to grow through 2009, its rivals will take progressively larger slices of the global pie. The Philippines and Russia are actively promoting foreign direct investment in their outsourcing industries. Outsourcing companies from a few East-European countries too, are cutting their prices to lure western companies. The Philippines itself may seem like a poor country beset with political strife and corruption, but its government is doing everything it can to get more American companies to outsource to it. It has been paying off. Along with inward remittances from overseas workers, business processing has become a major support for the economy and is expected to grow by 22 to 30 percent in 2009 despite the global downturn, creating some 130,000 jobs in a country where job creation is difficult at the best of times, let alone during a global economic disaster. Despite a scarcity of English-language skilled workers and a culture that in the past has encouraged intellectual property theft, China too is making dramatic strides in bolstering its outsourcing industry. According to a study by the international consulting company McKinsey, "China is in a remarkable position to become an IT outsourcing superpower in less than five years' time."
Earlier this year, as a
component of its massive US$585 billion stimulus package, the
government targeted 20 Chinese cities to be developed as bases for
outsourcing. The government recently approved tax
breaks and subsidies to boost the growth of its service outsourcing
industry. Its software industry grew by 30 percent per year for
the five years to 2006, with exports growing seven-fold according to
the McKinsey report.
Set as favorite
Bookmark
Email This
Comments
(10)
this has to be one of the major reasons americans are losing their jobs which then forces them to lose their homes and go on gov't assistance.
Votes: +0
report abuse
vote down
vote up
Search Engine Optimization is very complex and in my experience I have seen many business professionals waste a lot of money on SEO only to see that their site has had little to no movement toward the first page of results.
Votes: -1
report abuse
vote down
vote up
A mere online presence won’t serve the purpose of reaching out and impressing your target audience, to beat the competition you need a well designed website with a good search rank and for that you need help of companies which provide complete solutions in http://www.vsworld.com/?loadSw...opment.swf website designing and development and http://www.vsworld.com/?loadSwf=swf/seo_sem.swf search engine optimization.
Votes: +0
report abuse
vote down
vote up
A mere online presence won’t serve the purpose of reaching out and impressing your target audience, to beat the competition you need a well designed website with a good search rank and for that you need help of companies which provide complete solutions in website designing and development and search engine optimization.
Votes: +0
report abuse
vote down
vote up
 written by Web design & development company India , July 31, 2009
A good amount of business can be lost if the website is not well designed and even a well designed website wont be able to serve the purpose, if it does not hold a good search rank. Web SEO Development companies in India provide 360 degree solution in web designing SEO optimization.
Votes: +0
report abuse
vote down
vote up
I think Indian IT/Process companies are smart enough to swiftly change according to needs. Just a few years back, none of the large ones were interested in BPO and today most of them have a BPO outfit. The platform based BPO offerings have been launched recently by some of these to provide integrated technology and operations services. However, Indian companies need to focus now much more on innovation and new service areas than ever before.
Votes: +0
report abuse
vote down
vote up
By Outsourcing services such as website designing, flash, CMS development, internet Advertising, multimedia, graphic design, website maintenance, SEO, to professional and experienced IT outsourcing organizations can help any website to get a better visibility vertically as well as horizontally.
Votes: +0
http://www.outsourcewebsite.com report abuse
vote down
vote up
written by Jane , May 23, 2009
From an american standpoint- where we have a recession (if not depression) and everyone is on the rampage against "illegal" workers (mostly mexicans)- this has to be one of the major reasons americans are losing their jobs which then forces them to lose their homes and go on gov't assistance.
Votes: +0
i myself lost my accounting job to outsourcing to india. do i hate indians? no! i have good friends that are from india. i have neighbors that are from india. i just think we should keep some of these jobs here in the US. tax the companies that outsource it out to these nations. report abuse
vote down
vote up
written by Slum Dog Indian , May 22, 2009
This is a good article. Most of Indians are all talk no actions. They ca fool most of the people some times, or some of the people most of the time. However, they cannot fool all the people all the time. Sooner or later, customers will find out that Indians cannot deliver what they promised.
Votes: +1
Just like in Mexico, many companies started their outsourcing from Mexico many years ago. We all know where those factories are located today. Indians are good at get the IT jobs out of America. They cannot keep the jobs there for long by empty talks. report abuse
vote down
vote up
|
A growing flock of
competitors gets into the act
Subscribe to this comment's feed
Show/Hide comments
Show/Hide comment form
Winning Hearts and Minds in AfghanistanMichelle Price The grim truth of war remains: hearts and minds are lost in the campaign to get the enemy by the balls
Full Story |
| Other Articles |
India's Nuclear Push: The Conflicts Within Liability bill stalls on fears over nuclear disaster
Full Story |
| most read... |
Alice Poon
| Book About Land and Power in Hong KongFriday, 02 July 2010 | Alice Poon
The Chinese edition of “Land and the Ruling Class in Hong Kong” has finally come to life. The title of the book is “地產霸權” and it is co-published... Full Story |
| Previous posts: |
John Elliott: Riding the Elephant
| From vultures in Delhi, to coups in Pakistan, a journalist's un-edited take on current events |
|
Donate to Asia Sentinel
