New challenges and opportunities for the Indian outsourcing
March 6, 2010
Viewed broadly outsourcing comprises of the following information technology, human resources, engineering, customer service, legal services, knowledge based services, R&D and so on. Countries like India took to outsourcing like a fish takes to water because of certain natural advantages like low costs, a vast pool of technically proficient manpower and wide spread familiarity with the English language.
But these advantages have been in a sense milked to the maximum and a new strategy has to be arrived at if India is to continue to rule in the industry in the foreseeable future. Rather than rest on its laurels, India needs to redefine its outsourcing industry to the world. For instance India could try and tap the cloud computing technology which holds paradigm defining potential.
On an immediate basis Indian outsourcing firms need a global makeover to enable them to participate effectively in markets where IT has a dominating presence, the US healthcare industry being a case in point. Another huge market is business contracts offered by the US government.
The Indian BPO market will in all probability continue to grow at a blistering pace in the time to come (by some estimates it shall touch $225 billion by 2020. It would however auger well for the industry if it did not become complacent and factored in the challenges. The demand from the 1st world countries like New Zealand, Japan and Australia is expected to fall. At the same time there is likely to be greater competition from SAARC countries like Sri Lanka, Pakistan and Bangladesh.
India also needs to ensure that there is a great deal of innovation in the industry so as to maintain its cost competitiveness as well high levels of technical expertise. Augmenting its hardware capabilities for example would be a good way of showcasing a diversified portfolio of products and services.
In recent times the growth and penetration of broadband in India has grown substantially, and as this trend continues more and more skilled people will be able to offer their skills to markets around the world. Outsourcing itself will acquire a paradigm shift in people’s perception, as it will no longer be associated only with humongous transnational corporation. When people with skills as varied as that of schoolteacher or an architect can offer their services to far corners of the world, outsourcing would have well and truly become irretrievably entrenched in India. With the greatest number of young people in the world, accounting for a huge number of well educated and trained people India would be absolutely geared to accept all kinds of outsourced work from across the globe.
Thus we see that India is well poised to continue its dominance on the global outsourcing industry for a long time to come, provided it continues to innovate, hone its traditional skills and push for greater broadband connectivity. Sure there will be serious challenges, but India has it to rise to the occasion. The coming decade and beyond will continue to belong to India, in so far as Business Processes Outsourcing is concerned.