India has become a global leader in outsourcing due to its large, English-speaking workforce and lower costs compared to countries like the US. Outsourcing to India began in the 1980s with companies like American Express and has grown significantly since, contributing to India's economic growth. However, over-reliance on outsourcing carries risks if political decisions or rising unemployment in other countries reduce outsourcing to India in the future. India must develop other industries to ensure long-term, sustainable growth.

1. INDIA
AND
OUTSOURCING

2. INTRODUCTION
Now, we are in a borderless world, in which both
thought and works are borderless. The concept of global
village has become a reality due to the
telecommunication revolution. Business activities have
crossed the boundaries of geographical distances. Every
country, both developed and developing is taking full
advantage of this borderless market to exploit its
resources to the best use and grow economically strong.
As a result outsourcing is now hot in India also.

3. WHAT IS
OUTSOURCING?
Outsourcing is subcontracting a process, to a
3rd Party company being specialized in it.

4. OUTSOURCING - TYPES
There are three types of Outsourcing.
Offshore Outsourcing: that is contracted outside
a company's own country
Onshore Outsourcing : that is contracted with
the company's own country.
Nearshore Outsourcing : that is contracted to a
company's neighboring country

5. WHY DO COMPANIES
OUTSOURCE?
36%
36%
4% 13%
10%
1%
Reduce Operating Cost Focus on Core Business Improve Quality
Increase Speed to Market Foster Innovation Conserve Capital

6. OUTSOURCING- INDIA
 India holds a 70% market share in
the world wide Outsourcing market.
 More than half of fortune 500
companies outsourced to India.
 2010: $150 billion
 Contribute 1% to the GDP growth.

7. INDIA- OUTSOURCING CHRONOLOGY
AIRLINES
Early 1980s-several European airlines started
using Delhi as a base for back office
operations, British Airways being one among
them. The BA captive was finally spun off as a
separate organization called WNS Global Services
in 2002
AMEX
Late 1980s- , American Express consolidated its
JAPAC (Japan and Asia Pacific) back office
operations into New Delhi and NCR region. This
centre was headed by Raman Roy, and has been a
source of several leading names in the Indian

8. GENERAL ELECTRIC
1990s – General Electric started back office
operations in India (@ Gurgaon) -
GECIS (GE Capital International Services) .
Hired Raman Roy and several of his management
from American Express .
In 2004 GECIS was spun off as a separate legal
entity by GE, called Genpact.

9. THIRD PARTY BPOS
1999 - Daksh eServices in Gurgaon- email
support service.
2000- Efunds started in Mumbai and Gurgaon
2000 - Raman Roy quits GECIS to set up
Spectra mind in Gurgaon. Customer Asset and
24/7 Customer setup shop in Bangalore.

10. ENTRY OF IT MAJORS
2001 – Dell, HSBC, standard chartered, HP, Lead
the boom.
2002 – Wipro acquired Spectramind.
2002 -Infosys, HCL, Satyam, Patni
2004 – WNS becomes first Indian third party BPO
firm to hit $100 million revenues .IBM buys daksh
for $130 million.

11. 2005- onwards – Genpact,1-one
source, WNS, Convergys, HP… integrated IT
and BPO services. Infosys, Wipro, IBM
Accenture etc

12. WHY INDIA
 Large pool of highly qualified and English
speaking force
 Low cost of labor
 Appropriate time zone difference with the
west

13. WHY INDIA
 Educated employs.
 Large number of qualified workers Proven to
be the best in the IT and computer software
fields
 Produce around 100,000 engineers annually .
 Infrastructure:
 Telecom facility
 Power sector.

14. WHY INDIA
Government:
Realize potential for economic development
 Liberalization, Privatization and
Globalization-1991
Favorable policies have turned India in to
BPO/IT hub.
e.g.- Investment promotion, Telecom
policy, IT act.

15. OUTSOURCING COST PER HOUR.
U.S. - $27
Canada - $22
Mexico- $18
Carrabien- $16
Philippines - $15
India - $12
67-72% of costs to call centers operating in the US/UK
is directly linked to man power costs. India only spends
33-40% of costs on man power. This includes
training, benefits and other incentives for labor.

16. WHY INDIA?
THE OTHER SIDE
1. Size of Indian Population
2. Improvement in Education
3. Dreaming of Foreign Jobs
4. Respectability and Job Satisfaction

17. WE DEPEND ON
U.S : 59%
Europe, mainly U.K. : 27 %
Asia-Pacific :9%
Rest of the world :5%

18. OUTSOURCING TO INDIA
BPO : Business Process Outsourcing
CRM, Medical Transcription, Call Centers
ITES : Information Technology Enabled
Services
Software development, Data entry, Programming,
Web development services
KPO : Knowledge Process Outsourcing
Financial Analysis, Legal Services

19. CURRENT TOP INDIAN RANKERS
1) Infosys (2)
2) Wipro (4)
3) TCS (7)
4) ACS (11)
5) Genpact (20)
6) Neusoft (26)
7) HCL (32)
8) iGate (35)
9) Mind Tree (43)
10)TechMahindra (44)
source: International Association of Outsourcing Professionals
http://trak.in/tags/business/2010/04/23/top-best-100-outsourcing-companies-2010/

20. IMPACT OF OUTSOURCING IN
INDIAN ECONOMY
 Improved Indian economy
primarily by employing a large Losing many
number of people and traditional and cultural
maintenance of infrastructure. benefits. The
It is because of the outsourced outsourcing companies
projects that people at large in
India get opportunities to know
and projects emphasize
and work in MNCs. on the foreign cultural
 BPO companies also provide values
ample opportunities for women
and as such help them in their
liberation and liberalization.

21. RISK IN DEPENDING ON
OUTSOURCING
Over dependence on outsiders job is risky because of the
uncertain world of politics 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. In Europe
unemployment is not much better with especially Southern
European countries suffering from rates up to 21,3% in
Spain.

22.  Emergence of competitors including
Brazil, Philippines, Mexico, Canada, China and
Ireland.
 The emerging cloud sourcing market will cause the
destruction of the outsourcing market
We cannot imagine what would happen to the millions
of Indian youth engaging in the outsourcing job as the
government would not be able to provide an alternative.

23. CONCLUSION
Till date, outsourcing has done wonders for the
Indian economy within a short period. But over
dependence on outsourcing job is risky and
may make our economy vulnerable to
unexpected shocks.
The policy makers should convert these
resources for infrastructure and human capital
development for the long lived economic
growth and development of the nation.

24. THANK YOU
FOR YOUR
SUPPORT!
By
SHAMEER P H
FUS 100603
DEPT OF FUTURES STUDIES