ADVANTAGES OF OUTSOURCING AND OFFSHORE DEVELOPMENT:
The major advantages that drives offshoring than having a Captive Center is:
1. Cost Savings : By outsourcing the work that were done in house will often reduce the employee levels and related costs, such as recruitment, supervision, salary and other benefits. This also reduces the cost of equipment obsolescence and depreciation. A portion of the cost savings will go to the outsourcing company, but in return the company does not need to invest a lot in setting up infrastructure and hiring people etc, thus making a huge cost savings and reduce the work load.
2. Quality of Service : As your company will be the outsourcing company’s customer; you will likely experience a ‘can-do attitude’, which may not be exhibited by an in-house employee.
3. More Capital Funds : Off-shoring reduces the need to invest in non-core business functions, thereby making your capital investment free to make profits in the business.
4. State-of-the-art-Technology : Due to the huge scope in this field, outsources have to spend time and money on the latest equipment and on employee training to get competitive edge on others. By outsourcing in certain areas, you are assured of receiving the most efficient services and latest technological expertise within that particular function.
5. Price Stability : By IT outsourcing, you will likely be able to obtain stable pricing, eliminating the future need to shop around. It will also help to budget operating expenses and capital purchases more accurately, while potentially preventing the likelihood of surprise expenses.
6. New Business Partners : Outsourcers are always to be viewed as your business partner. And as a business partner, they share in the desire to keep your company operating at its maximum potential.
7. More time to focus on Core Business Activities : Outsourcing helps to focus more on your core business activities. As Management spends time in planning and directing the company’s business strategies and not wasting time in managing time in certain ancillary functions. This will help in improvising things in both the ways.
Other Advantages of doing business with companies in India:
~ Regardless of a succession of government coalitions, the Indian government continues to liberalize certain markets.
~ Extensive opportunities for trade through investment incentives, Examples include the so-called Special Economic Zones and the lowering of import tariffs for certain product groups.
~ A huge consumer market; boasting more than 1 billion consumers, many of whom have greater spending power than ever before.
~ Plentiful supply of young and highly qualified (technical) personnel.
– India has almost 400 universities and 1,500 research institutes.
– Each year, India produces 200,000 engineering graduates and 9,000 doctoral graduates.
~ Their knowledge and command of the English language is excellent .
~ India has a good legal protection framework for investments (one of the best in Asia, according to KPMG)
Why Only India??
India has been a one stop shop in providing the information technology outsourcing services all thought the globe. In today’s time India is called the outsourcing hub just for the fact that it can give best quality at lower price and hence reducing the operational costs.
Outsourcing to India gives companies a competitive edge to fight recession. The list of reasons being:
~Time zone advantage
There is a time zone advantage between India and the countries in us and Europe is a major factor why companies are outsourcing to India. The 24*7*365 days customer support is provided
With the release of bill termed “IT acts 2000” India has been rated as the most excellent investment potential destinations in the world. With government support it has been able to build many IT parks all thought the country providing better infrastructure and the government has even permitted 100% foreign equity. Growing economy also has played a vital role in it.
Cost effective services are the prime advantages that India offers a part from that India is also having skilled and talented pool of people. More than 20 Indian companies have achieved the cmm level and 65% of the CMM Level 5 companies in the world are located in India. It also has the highest level of ISO-9000 software organizations.