The growing shift in focus to IT services is a trend that has been slowly but surely gaining momentum over the past 2 decades. Initially, outsourcing to India benefits comprised solely of cost reduction. But over the past few years, solving capacity, enhancement of service quality, and efficient management of the business environment have also become major benefits that are being reaped by companies that are renowned for outsourcing work from USA to India.
At the rate at which the IT industry is going, IT outsourcing to India is an option that would be taken up by more and more companies to facilitate innovation, operational flexibility, and agility.
In 2020, Gartner reported that the net growth in the IT services market was close to 1.7% in USD. The main reason for this growth is the growing demand for digital solutions that are cloud or automation-based. What’s more important to notice is that the growth of the IT industry, unlike a number of other industries, was not hampered at all by the global pandemic. If anything, the pandemic showed the world exactly why digitization is a requirement of the age.
India’s Position in Global Outsourcing Statistics
The GSLI (Global Services Location Index) of 2021 ranked India in the top spot. Following India were three other Asian countries – China, Malaysia, and Indonesia. Other notable countries that maintained their foothold in the list of top ten countries in terms of outsourcing are the Phillippines, Vietnam, and Thailand.
The one thing that is fairly evident from the rankings is that India continues to maintain its spot of being the best country in terms of outsourcing. Out of 10, India scored a 7.09 rating while second-placed China could only manage 6.8. Following these two powerhouses, Malaysia and Indonesia completed Asia’s dominance in the top four spots with ratings of 6.22 and 6.21.
What are the Reasons Behind India’s Continued Dominance in the Outsourcing Market?
Deloitte conducted a study on the business that outsource to India. As per the reports that emerged from the study, 59% of all businesses worldwide are currently outsourcing to India. Of the remaining business, 22% are planning to outsource to India at some point in the future.
Let us take a look at why IT outsourcing to India is such a lucrative deal for most businesses.
1# Infrastructure
India boasts of housing, not one, but three separate IT hubs – Bangalore, Hyderabad, and Gurgaon. This has cemented India’s spot firmly at the top in terms of IT infrastructure.
One of the most important points of concern for the IT industry is communication. The smooth flow of communication in these IT hubs is facilitated by the well-developed cellular and telecom networks that cover almost every major city in the country.
India, by no means, is done developing in this sector. There is ample scope for further development. But when compared to other countries, India offers better facilities and highly optimized operational costs on ground.
2# Government Policies
The IT industry is given a high priority by the Indian Government. The infrastructure and communication systems that form the groundwork of the IT industry in India were helped immensely during their foundations due to the policies on telecom and taxation.
The Information Technology Act has helped recognize electronic contracts. This has facilitated the e-filling of various forms and documents. This policy has also been immensely effective in stalling attempts at cybercrime.
The reduction of the burden of compliance and registration requirements removal during the Covid-19 pandemic enabled BPO workers to work remotely. This has ensured that the growth of the IT industry isn’t hampered in any way.
3# Talent Pool Specialization
One of the main reasons why outsourcing work from USA to India is in vogue among companies is because of the ever-ready, specialized talent pool that India has. Providing around 4 million direct employment and over 10 million other forms of employment, the outsourcing market in India is huge.
Every year over 200,000 engineering and IT graduates are added to the workforce. This enables India to support businesses spanning a vast number of industries. This includes eCommerce, BFSI, healthcare, and technology, among various others.
4# Fastest Time-to-Market
India is situated in a completely different time zone. The 12-hour time difference between USA and India means that the work will be completed faster. This leads to greater efficiency and productivity.
How to Sustain India’s Domination in the Industry?
There are a number of areas where improvements can be implemented to ensure India’s continued dominance at the apex of the outsourcing industry.
1# Evenly Spanning Out the Work Pressure
Being the best in the business also means having to handle tremendous amounts of work pressure that comes with the distinction. The workforce must be handled in such a way that the case of shared resources is minimized as much as possible.
Shared resources is the phenomenon when the same workforce is responsible for multiple brands and companies. While this is quite common, there are instances when the workforce of a certain organization gets overstretched. This can cause a fall in productivity and quality of work.
To remedy this, a policy to even out the work pressure must be implemented if we are to sustain this position.
2# Societal and Cultural Differences
The companies that outsource to India often cater to customers whose social and cultural norms are vastly different than that of India. Employee training sessions should be implemented in these instances to ensure the smooth working of the company.
3# Data Leak Risk
Considering the fact that when outsourcing their work, businesses entrust major vital data and information about their companies to the outsourcing partner, it is imperative to put stringent safety and security measures in place to prevent data leaks of any kind.
The Edge that India Holds
The digital and technological space in India is one of the fastest-growing ones not just in Asia, but the entire world. The ability of the Indian outsourcing market to adapt and innovate according to the demands of the situation is one of the biggest outsourcing to India benefits enjoyed by businesses.
The announcement of a $10 billion investment fund by Google for the sake of the digital advancement of India makes it safe to state that India is going to be the place to look out for if you are looking to outsource.
