India still dominates offshore IT outsourcing

November 2, 2011: India has the demographic and historical advantage for being the leader in the IT services market across the globe.  Statistics shows that Indian software industry serves almost 50 per cent of the Fortune 500 companies. 

The largest customer of the Indian outsourcing services is the Americas. The IT and BPO services export from India to the Americas amounts to 60 per cent of the total exports. The Americas is followed by the Europe, which accounts for 31 per cent of the total services export.

In terms of software exports India stands second only after the United States. Over 40 per cent of the start ups in the Silicon Valley owe it to the Indian management and the technical talent. The main factor behind this achievement is the large number of English speaking professionals in India second only after the US. In addition to this India has the largest number of companies with ISO certification. 

There are many factors that give advantage for India in terms of IT services and outsourcing services. These factors include reduced cost, the advantage of time zone, excellent communication facilities, better talents, the access, favorable political situation, and the quality of service.

One of the main drivers behind outsourcing is still cost reduction. The economies of scale enjoyed by the outsourcing providers help them to offer services at a very low cost. This helps the companies in achieving cost reduction up to 30 to 40 per cent. More over the organization have an indirect cost advantage of not hiring employees for performing the task in house.

Another advantage that India enjoys is that of the time zone. When compared to US and UK, India has a different tome zone. For example, as a result of different time zone, tasks that are assigned from the US during the evening can be completed during the day and sent it back to the US, and by the time it will be morning in the US.  This has made India a favorable location for outsourcing.

The communication facility in India is excellent that almost all cities in India have cellular and internet accessibility. This helps in getting connected to people across the world. As a result the companies who outsource their work to India can be in touch with their vendors round the clock.

The Indian software industry serves across 95 countries in the world. This demonstrates the kind of reach Indian companies have across the world. India has a stable political system which extends full support to the IT and BPO industry in India. In India IT is given top priority and comes in the top 5 priority industries in India.

India enjoys the advantage of the largest number of English speaking people after the US. Moreover the number educated talents and professionals are also high in India. Another reason why India is a favorite destination for outsourcing is the high quality of service that the Indian IT companies deliver, that meets international standards. The companies also comply with ISO and SEI-CMM 5 standards.

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