Thoughts on Outsourcing Scenario during Recession

India and Outsourcing have always been in the spotlight as the well debatable topic in the recent years for being the favorite destination for outsourcing firms. Especially during the recessionary times, with every business trying to optimize the available resources, outsourcing stands out to be a very promising factor that would lead to sustaining profitability. It not only contributes as a strategic tool that cuts costs but also favors the steady growth of businesses.

Cost being the main driver, outsourcing and off shoring business have bulk savings along with other umpteen advantages:

• The estimated potential savings of the companies are done without compromising on the efficiency and effectiveness.
• Certainty of cost is better assured when outsourced and is the best solution which helps companies in allocating budgets for the annual fee.
• Hiring skills at lower costs that are not core to the company which is far better than just sending low skilled work to a low waging economy.
• With better infrastructure in terms of communication, India has no doubt become the most reliable and attractive business destination for outsourcing.

Challenges for 2009

Current global recession has become an instigating factor to continue innovation and streamline our cost structures to remain competitive in view of the increased global competition to India.

Points to ponder:

• The first half of 2009 has hardly seen any remarkable growth in the industry due to the global recession.
• Under the circumstances, the industry has been forced to change and emphasize its outlook from revenues to profit margins in order to maintain sustainability.
• Increasing the productivity level remains as one of the main challenges in 2009.
• The negotiation with the client pertaining to pricing also bears optimum challenge which acts as a blow to the revenues as well as the profitability.
• The ability to pull up billing rates could confront pressure.
• Cut-throat competition is seen in the industry in order to stabilize their stand as the major global players.
• Strong client relationship has become the order of the day, taking into consideration the economic fluctuations in the market.
• The job market also poses a serious challenge.

Why is India the most attractive destination for Outsourcing despite recession?

India has always been the most talked about power house catering to the needs of the global players. No doubt, India is a complete solution provider with its effectiveness and efficiency in terms of quality, flexibility, cost-effectiveness and technical ability.

Advantage India, in a nutshell:

• With abundant and talented resources, in terms of technology and English-speaking workforce.
• India also has a very large number of training institutes of International repute which focuses not only at honing the resources but also adds proficiency in various domains.
• India offers the services with maturity and world class solutions.
• Information technology has maintained its place as the top priority for Indian Government.
• Ecommerce is brought within the purviews of laws and accords stringent punishment to cyber-crimes.
• India, being an expert in International business systems, has given ample scope for the Indian professionals to provide a global outlook in various international methodologies and processes.
• We have strongly adhered to the International standards of quality.
• India, being adept at working with people from diverse cultures and background, paves way to understanding International affairs and diverse culture
• In order to build an atmosphere of goodwill and harmony, India is a member of several prestigious international and regional associations including UN, IMF, WTO, ASEAN, SAARC.
• India offers a stable and economic growth and is one of the world’s fastest growing economies.

Forecast by Gartner

• According to Gartner, India's share of the market is set to double between 2008 and 2010, citing demand for cheaper options during a global recession as India is a low cost high quality outsourcing destination.
• India still remains an attractive destination for new BPOs to start operations with easy regulatory norms and cost advantage, according to analyst firm Gartner.
• Indian BPO providers are swiftly evolving to balance exposure to vertical industries, currency and legislation issues.
• "It's highly likely that many new competitors will emerge from India during the next few years. Contact centers and analytics services will likely see the highest growth," Cathy Tornbohm, research vice-president at Gartner, said.
• "Indian BPO providers are swiftly evolving to balance exposure to vertical industries, currency and legislation issues," Gartner's senior research analyst Arup Roy said. "Their strategies include investing in onshore and near-shore delivery, and pioneering new area of analytics services or knowledge process outsourcing (KPO), where Indian BPO players are shining," he added.

The offshoring delivery model is very well established in the Indian Industry along with its positive chances to increase drastically in the coming years. The new non-English-speaking clients will choose India as it is the most attractive destination for outsourcing.