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Outsource to India: What you need to know

Outsourcing to India

Outsourcing has proven itself to be a beneficial, win-win move for companies and their employees. Not only does it help businesses outsource their repetitive tasks to an offshore team, but it also helps employees find jobs that are perfectly suited for their skills and capabilities.

India is probably the first country that people think about when it comes to outsourcing since it has built a name for itself in the outsourcing industry. Even while surrounded by other emerging outsourcing destinations, India continues to stand out.

Fast facts about outsourcing to India

India is widely known around the globe as an outsourcing haven. A typical outsourcing firm offers excellent services for an affordable cost provided by a young, diverse labor pool of dedicated employees.

Here are some fast facts about outsourcing to India:

  • India ranked 35th out of 100 in the world in English Proficiency and fifth out of 25 countries in Asia.
  • According to India’s outsourcing body, the National Association of Software and Services Companies (NASSCOM), the information technology (IT) and business process outsourcing (BPO) industry in India garnered $154 billion in revenue in 2019.
  • The Indian government is fully supportive of developing its IT and outsourcing industry.
  • India’s outsourcing industry coverage is diverse. They have clients from manufacturing, healthcare, travel, telecommunications, retail, and media.
  • The most popularly outsourced services to India in 2018 and 2019 were mobile application development, customer support, data entry, BPO, and data center operations.
Fast facts about outsourcing to India
Fast facts about outsourcing to India

Why do companies outsource to India?

Through the years, India faces really tight competition within the BPO industry, from the Philippines, Bangladesh, Poland, and the United States.

However, the country still manages to be recognized as one favorite outsourcing destination of multinational companies across the globe.

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How do they do this? What are the advantages of outsourcing to India?

Budget-friendly services and flexible pricing options

Companies from developed nations offshore parts of their business processes to India as they are able to majorly cut costs.

An in-house software developer in India, for example, can be negotiated to around $15 per hour. It’s very cost-effective, especially if you compare it to hiring in-house, where developers cost around $80 per hour.

The development cost in India is 30 to 35 per cent lower compared to the US and Europe. You will also be assured of acquiring quality service as the country is among the leading outsourcing destinations in terms of the IT industry.

Indian outsourcing companies typically offer flexible pricing options. You can pay by the hour, by the week, per month, or project.

The pricing flexibility allows companies more freedom and creativity in managing their budget, at the same time, save costs.

English communication is not a barrier

India claims to be the world’s second-largest English-speaking country, second only to the United States. Its English-speaking population of 125 million is expected to quadruple in the next decade.

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If this doesn’t convince you that communication is not going to be a barrier when outsourcing in India, we don’t know what will.

Large talent pool

Around 3.1 million fresh graduates join the Indian workforce every year. This means that outsourcing companies and clients are given access to a vast pool of young and seasoned talents.

Quality services provided by country’s skilled professionals is what primarily attracts companies to choose India for their outsourcing needs.

Well-developed infrastructure and technology

India provides state-of-the-art technology and cellular networks in all major cities and towns. Because of this, clients are sure that their outsourced employees will be using the latest and best in software technology.

The Indian government has also invested in infrastructure and technology to reflect international standards.

Why do companies outsource to India
Why do companies outsource to India

These advantages discussed above serve as the country’s competitive edge against any other preferred outsourcing destination out there.

The cons of outsourcing to India

Outsourcing your non core tasks is generally a good idea, as long as you have chosen the right outsourcing company to partner with.

The key is doing enough research to find the best Indian BPO company that would work well with your company.

Confidentiality issues and data security risks

When outsourcing, you might lack the assurance of how your service provider handles your data, which risks your data security.

To deal with these issues, companies should sign a non-disclosure agreement with their outsourcing service providers.

Unwanted/hidden expenses

Making the mistake of partnering with the wrong outsourcing services provider can add up more expenses.

Cultural and communication differences

Foreign companies should always be aware that offshore outsourcing to India comes with cultural and time zone differences.

Time zones can be a problem especially for urgent cases, as some offshore teams can sometimes take over 24 hours to fix a single issue.

Your team may also need to adjust to and accommodate social and cultural practices of the vendor. This includes native language and accents that cause communication difficulties amongst parties.

But what’s good about outsourcing companies in India is that they provide remote teams that are able to speak the English language fluently.

India's outsourcing competitors
India’s outsourcing competitors

Commonly outsourced services in India

If you are looking to farm out parts of your business operations to India, here’s a list of the top outsourcing services in the country:

Software development

As we have mentioned earlier, India is globally renowned in the IT industry. Outsourcing software development and web development in India allows multinational companies to fill in talent gaps. More so, tap into a wide pool of IT specialists.

A recent report provided by NASSCOM showed that in 2020 alone, the country has over 4.36 million IT professionals.

To name a few of the leading outsourcing software development providers in India – Tata Consultancy Services, Hyperlink InfoSystem, and HCL Technologies.

Mobile app development

Mobile app development has become a crucial element of every organization these days. Apart from establishing a web presence, businesses with digital platforms are also required to be mobile friendly.

Mobile app development can be costly and should be done by the right people. Outsourcing to India grants companies cost reduction benefits without having to sacrifice the quality of the output.

Digital marketing

Offshore outsourcing providers in India also has digital marketing mavens that can help strengthen your brand’s online presence. More so, ensure that you are able to engage effectively with your target consumers across various social media channels.

Back office services

A typical Indian outsourcing partner offers back office solutions that caters to your type of back office services needs. Examples of these services include data management, data entry, data mining, data processing, and other types of back office support.

Customer support services

Business process outsourcing companies in India, particularly call centers also offer customer support services that can cater to the global market. Among these services include chat, email, inbound, and outbound call support services.

India’s outsourcing competitors

India will always belong to the top options when it comes to the top outsourcing destinations.

However, as mentioned above, the country comes neck and neck with other developing outsourcing locations around the world.

Let’s get to know India’s competitors:

1. The Philippines

The Tholons Globalization Index ranked Manila, the Philippine capital, as the second-best city for outsourcing in the world in 2018. With over 92 percent of Filipinos who can speak English, combined with the low global value of the Philippine peso and the country’s serious educational reform in the past several years, the Philippines is on its way to becoming globally recognized as the world’s leading outsourcing destination.

2. Poland

HackerRank has named Poland as the country with the third most skilled programmers in the world. The country’s tech expertise is partnered with its employees’ English fluency since fluent English is a standard for graduates.

Some companies in developed countries also opt to outsource to Poland since the time difference is acceptable. Another thing is, their price is still relatively low.

3. Brazil

Brazil was dubbed as the IT outsourcing alternative to India in 2010 and has been an emerging force in IT outsourcing since then. The country takes pride in its relatively young workforce (38.18% of its working population is under 24 years old), as well as its 6.18 million fluent English speakers.

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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.