IT Outsourcing Proves To Be Cost Effective


Companies outsourcing back office work to India save as much as 60% of their cost every year, the National Association of Software and Service Companies reports. The difference in wages between the parent location in the U.S. OR U.K. and India is more than 70-80% for offshorable processes. However, interaction costs increase by 10-20% because India is a remote location, which result in net savings of 40-60% for the offshored processes, according to a Nasscom report.

Pointing out that the savings are directly related to the amount of work being outsourced to India, the Nasscom points out that, insurance and banking generates the bulk of savings because of the high proportion of processes that can come offshore. It has been estimated that the banking and financial services sector in the U.S. has made savings to the tune of $8 billion in the last four years by outsourcing to India.

Even in the extreme scenario, where wages grow by 9%, India will still have a 70% advantage in 2008. In a more realistic case, if wages increase at 3%, Indian operators will be 80% cheaper than their U.S. counterparts in 2008, according to a Nasscom report.

Nasscom also points out that, Indian outsourcing centres attract people who are more skilled and talented than those who work in the U.S. or U.K. Indian outsourcing centres have a higher productivity compared to the call centre operators in the U.S and U.K.

Jesmine

India’s Animators Ride Outsourcing Wave

Cute cartoon characters and sleek special effects may not seem obvious candidates for outsourcing, but Indian studios are popping up alongside software firms and call centers that do work for firms in the west.

Late comer India has started to gain favour over more established animation centers such as Taiwan, Singapore, South Korea and the Philippines, in films, television shows and electronic games.

India is winning animation contracts for the same reasons it has become such a hot outsourcing destination for other industries: lower costs, a large English speaking workforce and a track record in meeting Western companies’ technology needs.

A recent US$ 14 million deal between Italy’s Mondo TV, Europe’s No 2 cartoon producer and distributor and India’s Padmalaya Telefilms, is the latest boost to India’s creative reputation.

Jesmine

New Hot Spot In the BPO Map: Pune


Mumbai’s cousin, Pune, has seen a sea change and has emerged as a hot spot for companies outsourcing to India. At the moment, the Maharashtrian city is playing host to a whole range of visitors outsourcing to it. The city is now emerging as one of the most favourite outsourcing hubs of the country after Mumbai, Gurgaon and Bangalore.

According to experts, the fact that Pune is rich in human resources, helps MNCs establish a vertical setup in the city. As more and more companies are outsourcing to Pune, it is time for Mumbai, Noida and Bangalore to take a backseat.

A pleasant climate, along with short distances, a high standard of living, educational infrastructure, air connectivity, proximity to commercial hub Mumbai and strong local and state government support are factors that have contributed significantly to the growth of Pune as an outsourcing hub.

Also, social scientists believe that ‘Puneites’ have a ‘stable’ mindset and are, thus reluctant to move out of the city. Consequently, most are unlikely to switch jobs easily, which is a huge advantage for the outsourcing sector, beset with a 42 per cent rate of attrition.

And as bigger cities become saturated with each passing day, more and more outsourcing companies are cool with the choice of Pune, replete with resources, skills and a huge accent-neutral English speaking talent pool

Jesmine