Indian IT Firms Treading Towards Smaller Cities
Smaller Indian cities, which offer better prospects, are likely to witness Indian software makers and outsourcing firms queuing up before them. This changeover can be noticed due to the overcrowding and crumbling infrastructure in the metros.
The smaller cities are attracting IT firms and outsourcing firms like never before, as a large pool of human resource backs these cities, infrastructure and policy support. According to a recent study jointly conducted by Nasscom and KPMG, a city like Jaipur, hitherto ignored by IT services and outsourcing firms might soon emerge as a major hub due to a number of positive factors and government initiatives. Jaipur retains the advantage of small city- lower travel time, real estate and power availability. It has gained global visibility as the tourism hub of Rajasthan and is trying to leverage this for IT and ITES industry.
Similarly, Pune has also the potential to emerge as a preferred destination for software development and outsourcing activities in the country. The report says Pune was currently ranked attractive on parameters like human resources with more than 190 colleges, providing education in engineering, management and others, producing around 200,000 graduates every year. It has long been regarded as a location for industrial engineering and logistics businesses and this has naturally drawn investments from IT and ITES companies in related industries.
Overall cost of living in Pune is 37 percent lower as compared to that in the country's financial capital of Mumbai, impacting the house rent and transport allowances under cost-to-company.
Jesmine
Thursday, August 12, 2004
Wednesday, August 11, 2004
The New Mantra- ‘Outsource Your Job To Earn More’!
The recent mantra doing the rounds in the US IT sector is ‘outsourcing one’s job to earn more’! Programmers are outsourcing their software modules to cheap and efficient labour in India. In this manner, they get more time as well as more money. In fact, they earn doubly, one from the outsourced job and other from the new job that they undertake.
By adopting this technique, the techie is able to promote himself outsourcing the specific modules to one or more Indian techies. He takes the charge as an overall project manager. Smarter techies are working for three to four companies at the same time, outsourcing all the coding and just supervising them for few hours a day. This way they are able to earn four to five times more than what they used to.
The idea has given rise to firms named as micro nationals. These firms hire a small number of sales and marketing people in the U.S. The software products are developed in Bangalore, Pune or Hyderabad.
Jesmine
The recent mantra doing the rounds in the US IT sector is ‘outsourcing one’s job to earn more’! Programmers are outsourcing their software modules to cheap and efficient labour in India. In this manner, they get more time as well as more money. In fact, they earn doubly, one from the outsourced job and other from the new job that they undertake.
By adopting this technique, the techie is able to promote himself outsourcing the specific modules to one or more Indian techies. He takes the charge as an overall project manager. Smarter techies are working for three to four companies at the same time, outsourcing all the coding and just supervising them for few hours a day. This way they are able to earn four to five times more than what they used to.
The idea has given rise to firms named as micro nationals. These firms hire a small number of sales and marketing people in the U.S. The software products are developed in Bangalore, Pune or Hyderabad.
Jesmine
Tuesday, August 10, 2004
China Fast Rising As a Service Outsourcing Hub
China is fast emerging as a service-outsourcing hub and is likely to catch up with India by 2007. Connect IT China, a Shanghai-based consultancy, has estimated that China’s software outsourcing revenue would double to $5 billion by 2005. China is joining English-speaking countries such as India and the Philippines as a key destination for outsourced service jobs.
So far China is focused on providing back-office support for financial service, telecom software and retail companies in neighbouring Asian countries where operators can easily talk in Japanese and Korean languages. But it is making inroads as an outsourcing base for English speaking nations. China’s low cost talent is another edge, although India is a powerhouse in high-end IT services.
Jesmine
China is fast emerging as a service-outsourcing hub and is likely to catch up with India by 2007. Connect IT China, a Shanghai-based consultancy, has estimated that China’s software outsourcing revenue would double to $5 billion by 2005. China is joining English-speaking countries such as India and the Philippines as a key destination for outsourced service jobs.
So far China is focused on providing back-office support for financial service, telecom software and retail companies in neighbouring Asian countries where operators can easily talk in Japanese and Korean languages. But it is making inroads as an outsourcing base for English speaking nations. China’s low cost talent is another edge, although India is a powerhouse in high-end IT services.
Jesmine
Thursday, August 05, 2004
Offshore Outsourcing Is Not Just About Cost
One should understand the need for offshore outsourcing better before making a decision. Cost is definitely one of the main reasons for offshore outsourcing to India, but one should realize that this cost advantage might not be seen immediately. Initial investment in infrastructure, training, and other such preliminaries may make one believe that the cost advantage promised is just the illusory pot of gold on the other side of the rainbow.
However, this cost advantage is seen over a period of time in an outsourcing venture which involves a committed relationship and understanding between both parties involved. There will be savings and along with these savings there is great value addition. Most who outsource only realize the quality and value addition after the offshore outsourcing relationship begins. This is not usually the primary goal when deciding to outsource, and the creativity and talent in India comes as a surprise to many.
Cost reduction was only part of the reason that companies were considering offshore outsourcing, there were benefits to be had in time-to-market and quality, leading to an adage that companies initially chose India to save costs but stayed for the speed and quality.
Jesmine
One should understand the need for offshore outsourcing better before making a decision. Cost is definitely one of the main reasons for offshore outsourcing to India, but one should realize that this cost advantage might not be seen immediately. Initial investment in infrastructure, training, and other such preliminaries may make one believe that the cost advantage promised is just the illusory pot of gold on the other side of the rainbow.
However, this cost advantage is seen over a period of time in an outsourcing venture which involves a committed relationship and understanding between both parties involved. There will be savings and along with these savings there is great value addition. Most who outsource only realize the quality and value addition after the offshore outsourcing relationship begins. This is not usually the primary goal when deciding to outsource, and the creativity and talent in India comes as a surprise to many.
Cost reduction was only part of the reason that companies were considering offshore outsourcing, there were benefits to be had in time-to-market and quality, leading to an adage that companies initially chose India to save costs but stayed for the speed and quality.
Jesmine
Tuesday, August 03, 2004
India To Ease Tax On Outsourcing Units
India is set to ease the tax burden on multinationals outsourcing work to units in India, to bring them into line with local outsourcing firms that enjoy a tax break. The change in the rule removes the distinction that had meant the outsourcing units of multinationals were taxed more heavily than other parts of their business in India.
The government had said previously multinationals outsourcing their non-core business to India were exempted from tax, but there was doubt over how officials would interpret this ruling.
Finance Minister, P. Chidambaram had resolved the issue and a foreign company would now be taxed more heavily only if it pays its dependent Indian unit less than market rates for a service.
Jesmine
India is set to ease the tax burden on multinationals outsourcing work to units in India, to bring them into line with local outsourcing firms that enjoy a tax break. The change in the rule removes the distinction that had meant the outsourcing units of multinationals were taxed more heavily than other parts of their business in India.
The government had said previously multinationals outsourcing their non-core business to India were exempted from tax, but there was doubt over how officials would interpret this ruling.
Finance Minister, P. Chidambaram had resolved the issue and a foreign company would now be taxed more heavily only if it pays its dependent Indian unit less than market rates for a service.
Jesmine
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