History of Outsourcing in India
Kiran Karnik, the president of the National Association of Software and Services Companies (NASSCOM) wrote in his book “The Coalition of Competitors”- “The year 1989 was an important moment in India’s outsourcing history”.
Then Chief Executive of General Electric, Jack Welch, at a meeting in New Delhi persuaded India to place order for G.E aircraft engines. Sam Pitroda, the technology adviser to the Indian Prime Minister then, in return asked them to outsource $ 10 million of I.T. software work to India. Karnik writes that G.E.’s chief was surprised, but he ultimately complied. G.E. is one of the, if not, the first U.S. Company to outsource software work to India. Other early players in the Indian outsourcing market were British Airways, Swissair and Texas Instruments. Business Outsourcing of processes like billing, data processing and customer support began towards the end of the 1990s.
India’s policy-makers, till 1991, followed economic policies leaning towards state-controlled industries, there by proving detrimental to open trade. Later, due to a balance of payment crisis, liberalization of the economy started. In 1994, The Government of India announced a policy under which the telecom sector was liberalized and private participation was encouraged and enhanced. In 1999, The New Telecom Policy was announced introducing IP telephony which ended the state monopoly on international calling facilities.
With developments in economic policies over the years, concomitant with the arrival of globalization which started in the 1990s, the Business Outsourcing Sector of India has made such phenomenal pace and continues to flourish.
In the 90’s most of the organizations undertook outsourcing as a cost-saving method for a single Project. Now, in the 21st century, they started with outsourcing a complete process rather than just one project and then the trend of outsourcing complete processes to India took over as a strategic medium of doing business.
The companies started with outsourcing monotonous tasks such as Data entry, accounting, call centre services, data process, email chat support, data security services and many other outsourcing services.
India as a Global Outsourcing Destination
India offers advantage in terms of area, talented pool of human resources, convenience, scalability, cost of operations, and risk minimization. Since the inception of software outsourcing services, India has proved to be a prime location for outsourcing. India offers extensive range of services in IT, BPO, KPO, R&D, and engineering services and in mature service providers. Some the noteworthy factors behind are:
India Offers Flexible and Lesser Pricing
Indian Outsourcing industry has travelled the globe, there is rarely any place left. Indian companies offer their services to all types of businesses. They offer flexible pricing options to businesses. An average rate of operation as per the business contracted is $15-$65 which is extremely low-cost in comparison to other countries.
India has highly- skilled and competent resources. As per the report of PWC in 2020, India is a strong representative of a large and talented pool specially from the IT/ITES Industry. India is the second largest country with more than 100 million English speaking resources. There are 3 million people employed every year directly and indirect count might exceed 10 million. From the Engineering track 2,00,000 engineering graduates pass every year and join the IT sector.
Indian Government & their Supportive Policies
Major component of Indian GDP comes from outsourcing business. It is because of the encouraging policies drafted in favour of cross-border trading and development. The Indian government has made laws such as the Information Technology Act, 2000 and The Contract Act, 1872 which deal with data security and privacy.
Indian Services Offer Integrity and Qualitative Deliverables
Indian outsourcing market is known for its integrity and qualitative solutions with timeliness and business profitability.
India proffers Unbeatable Infrastructure and Technical Services
All the latest technology trends offer modern and technologically advanced services to all business. The infrastructure set up in India is unparalleled as their businesses struggle with new and unique types of client requests.
Expert MNCs Already Winning the Game
Many small, medium or large enterprises have already imprinted their name as leading software outsourcing companies. TCS, Infosys, Wipro, HCL are to name a few, many more are in the list.
Time zone advantage allows working round the clock
The time difference between countries like India and the USA, Canada is 10-12 hours. This permits the professionals to work 24×7 for emergencies. Moreover, the Indian employees are so flexible that for the convenience of clients located in another outsourcing region they are ready to work as per their time zones.
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