Impact of outsourcing on indian economy- by Software development company in india

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Impact of Outsourcing on Indian Economy

Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees.

Types of Outsourcing:1. Onshore Outsourcing2. Offshore Outsourcing3. Nearshore Outsourcing

What is Outsourcing?

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Outsourcing

Outsourcing may be broadly classified into:Information Technology(IT)Human Resource(HR)Customer ServiceEngineeringKnowledge ServicesR&D,etc.

BPO and KPO are the two major outsourcing components of the Indian outsourcing industry.




Why: Outsourcing?

Today, 73 % of Fortune 2000 Companies says “offshoring” is an important part of their overall growth strategy.(Source : 2005 Duke University CIBER/Archstone Consulting study)

It is a common practice to outsource development requirements for:Expertise in latest technologyRapid deploymentLowered costs

NASSCOM reports that almost half of the Fortune 500 companies choose outsourcing software development to Indian firms.




Why India?




Why India?




Factors

Largest technical and professional talent in the world.Offers flexible pricing options.Provides high quality servicesBest in infrastructure and technological capabilitiesIndian Government is stable and offers attractive IT policiesIndian companies provide quickest time-to-market




Role of Outsourcing in Indian Economy









Source : Everest,IDC,NASSCOM





Source : Everest,IDC,NASSCOM




Economical Impacts

Outsourcing industry has provided positives such as: Increasing national income Greater employment avenues Increase in tax revenues which caters in the growth of infrastructure, catering

etc.




Cultural Impacts

Losing many traditional and cultural benefits. The outsourcing companies and projects emphasize on the foreign cultural values.

The gap between fast-growing and slow-growing areas widening.




Risks in Outsourcing

Over dependence on outsiders job is risky because of the uncertain world of politics as they are controlling the economics. A war or a foreign policy decision may snatch the outsourcing job.

For e.g.; as the US unemployment level is rising, the American politicians are bringing out more proposals that appear to limit the use of offshoring.




Risks in Outsourcing

Emergence of competitors including Brazil, Philippines, Mexico, Canada, China and Ireland.

The emerging cloud sourcing market will cause the destruction of the outsourcing market




Refrences

NASSCOM. (2015). The IT-BPM Sector In India. NASSCOM.

Sachs, N. B. (n.d.). India in the Era of Economic Reforms - From Outsourcing to Innovation.




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