"India is the land of dreams and romance, of fabulous
wealth.... cradle of the human race, birthplace of human speech, mother of history, grandmother of legend,
great-grandmother of tradition.... Our most valuable and most instructive materials in the history of man are
treasured up in India only...."
Over the past decade, India
has emerged as the favourite destination for international companies wishing to
outsource their IT needs. In the past few years, India has become the hub of
IT-Enabled Services with many Fortune 500 companies outsourcing their customer
care and BPO centers to either third party companies based in India or setting
up a captive center. Now these international companies are outsourcing
engineering services to Indian companies thus providing them with opportunities
to move up the value chain.
Some important reasons for
India's emerging dominance in this field are: -
The focus of the ministry of
Information Technology is on development of globally competitive quality
manpower in Electronics, Information Technology, and Telecommunications.
Recognizing the growing importance of the IT- Enabled Services sector, the
Government of India has introduced various policy concessions and initiatives to
accelerate the growth of the market. The Indian software and services industry,
spearheaded by associations such as Nasscom (National Association of Software
and Services Companies - India) has also taken various steps to
ensure that India becomes the global hub for IT-Enabled Services outsourcing in
High Quality of Education
The Indian education system
places strong emphasis on mathematics and science, resulting in a large number
of science and engineering graduates. Mastery over quantitative concepts coupled
with English proficiency has resulted in a skill set that has enabled the
country to take advantage of the current international demand for remote
development and IT outsourcing.
India has some of the best
engineering colleges in the world, with the IIT’s being the premier institutions
The government of India has taken steps in the
field of education to ensure that India is geared to fulfilling its potential of
becoming the IT & ITES hub of the world.
Some of these steps are:
Upgradation of quality of
education in existing institutions,
Identification of gap areas
and developing specialized programs, and
Introduction of new
Out of the population of over 1 billion people, 300 million speak
English fluently and are skilled in various fields. The country's English
speaking manpower rates high in areas such as qualifications, capabilities,
quality of work and work ethics. This places India ahead of competitors.
At any given point, about 6
million people are enrolled in the country’s 200 universities, 5000 colleges,
and 100, 000 secondary schools (approx.).
Vast pool of engineering talent
India has an enormous talent
pool of highly qualified and trained scientists, engineers and technicians.
Indian engineers have proven their capabilities worldwide in all industries
notably design engineering, research and development and software services. The
high quality of Indian engineering has been freely acknowledged by international
companies and contractors working in India as also by the large number of
companies elsewhere in the world utilizing services of Indian engineers.
India’s manpower is
attractive to international companies also because of its higher productivity.
The reasons for the higher productivity are
More working hours - Indian
companies usually work six nine-hour days as compared to five eight-hour days
abroad. This contributes to about 35% more work being done during the week by
the Indian manpower as compared to their international brethren.
Higher Output - In certain
IT-Enabled Services, reports have shown that Indian centers have achieved higher
productivity levels-for example, the number of transactions per hour for back
office processing, than their Western counterparts.
Lower turnover of employees
- IT Enabled Service companies are not only paying its employees more than the
average salaries but are giving them a world-class environment to work in
wherein all their daily errands (payment of bills, personal travel etc) are
taken care of by the company’s HR department. This leads to higher motivation ,
dedication and satisfaction resulting in a low turnover of employees thus
increasing the productivity of the company and also saving in terms of training
new staff members.
requirements that are needed by India to become the hub of services exist.
a) India’s telecom and
internet infrastructure has nearly approached parity with those of the western
b) The Indian central and
state governments have set up many Software Technology Parks around the country
that house IT and ITES services companies.
India is able to offer a
24x7 service and reduction in turnaround times by leveraging time zone
differences. India's unique geographic positioning makes this possible. Indian
IT-enabled companies work in three shifts providing you with round the clock
operations. For example, due to the average 12 hour time difference between
India and North America, Indian offices work while those in N. America are
closed and vice-versa—this has the effect of continuous working cycle and
Quality of service
Indian companies have earned
the reputation of providing their international customers with good quality
service because of its educated, skilled and talented manpower, along with their
dedication achieving highest quality standards. Indian companies have unique
capabilities and systems for setting, measuring and monitoring quality targets.
Companies embracing high quality standards such as Six Sigma have discovered
that certain countries, notably India, offer a work force culturally better
suited to complying with the rigors of quality process. As of 31st March 2002,
India had 42 companies at SEI CMM Level 5 assessment.
Indian companies are not
only able to provide world-class quality solutions to you round the clock, they
are able to provide them to you at a very competitive rate due to the lower
salary standards in India. According to www.salary.com, a typical Cad Drafter
working in California -- Los Angeles earns a median total compensation including
benefits of $53,240. The cost of an Indian CAD Drafter working in India would be
about $ 12,000.
According to the NASSCOM
(National Association of Software and Service Companies – India ) McKinsey
report, the IT-enabled services industry will employ over a million people in
2008 and the revenue potential is of about 17 billion US dollars. The growth of
IT-enabled services in India has risen from 0.8 billion US dollars in 1999-2000
to 1.5 billion US dollars in 2001-2002.
Tech researcher Gartner
recently forecasted that more than 80 percent of multinational companies will
use IT outsourcing to save money, overcome skills shortage, and increase
flexibility, with most of this working heading towards India.
A comparison amongst some
countries in Asia Pacific based on these factors highlights the following:
1 denotes low; 2 denotes
average; 3 denotes high
Source: McKinsey & Co.
See also: -
Companies in India
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