 |
| | | Advantage |
| The abundant skilled manpower has made India
a target destination for multinationals to back end their operations in India.
India ranks high in areas such as qualifications, capabilities, quality of work,
linguistic capabilities and work ethics, and thus is ahead of competitors such
as China, Philippines, Ireland, Australia, Canada etc. Indian companies have unique
capabilities and systems to set, measure and monitor quality targets. In specific
BPO categories, Indian centres have achieved higher productivity levels than their
Western counterparts. Also, India is able to offer a 24x7 services and reduction
in turnaround times by leveraging time zone differences. India's unique geographic
positioning makes this possible. Many state governments in India are offering
incentives and infrastructure to set up IT enabled services. About 100,000
engineers graduate from India every year. Many of these engineers are employed
with call centres for troubleshooting and providing technical support at salaries
that are dramatically lower compared to the pay scales in the US. The average
monthly salary in India is $400-700 compared to $2,700-2,800 in the US.
Speaking on a conference call from the US, Michael F Corbett, conference chair,
President and CEO, Michael F Corbett & Associates said, "The world outsourcing
market is estimated to be about $5 trillion according to Outsourcing Research
Council 2002. Nearly 20 per cent of this is constituted by the IT and ITES market,
which is growing at about 15 per cent per annum."
"Of this,
India receives only about 2 per cent of the work, which indicates the huge potential,"
he said. | | | | WHY
INDIA? | In order to meet the
growing international demand for lucrative, customer-interaction centres, many
organizations worldwide are outsourcing these services from locations like India.
India has inherent strengths, which have made it a major success as an outsourcing
destination: -
Scope
A booming IT industry, with
IT strengths recognized all over the world. -
Language
The largest English-speaking population after the USA. -
Manpower
A vast workforce of educated, English speaking,
tech-savvy personnel: A boon in a high-growth industry faced with a shortage of
skilled workers. Cost-effective manpower: In a
call interaction centre operation, manpower typically accounts for 55 to 60 percent
of the total cost. In India, the manpower cost is approximately one-tenth of what
it is overseas. Per agent cost in USA is approximately $40,000 while in India
it is only $5,000. -
Technical support: India
graduates about 100,000 engineers each year. These can be used in call centres
for troubleshooting/tech support, as the salaries are dramatically lower than
in Europe or the US. | | |
| Government
policy |
| » | The
Government of India has recognized the potential of IT-enabled services and has
taken positive steps by providing numerous incentives. | | » | IT
is one of the Government of India's top five priorities. | | » | The
National IT Task Force submitted its 108-point Action Plan to promote IT in the
country. The Government of India has approved the plan and is in the process of
implementing it. | | » | A
separate Ministry of Information Technology was set up to expedite swift approval
and implementation of IT projects and to streamline the regulatory process. |
| » | Information
Technology Act 2000: The Information Technology Bill that was passed in the Indian
Parliament in May 2000, has now been notified as the IT Act 2000. The IT Bill
brings E- commerce within the purview of law and accords stringent punishments
to "cyber criminals". With this, India joins a select band of 12 nations
that have cyber laws. | | | |
| Regulatory
Enablers | » 100%
foreign ownership permitted in IT Enabled Services industry unlike other sectors
where
foreign ownership is restricted
» Software
Technology Parks (STPs) established
» To provide ready
to plug IT infrastructure and telecom facilities
»
Single window clearance for all regulatory compliance issues | | |
| Infrastructure
Enablers | »
Basic, Cellular, Paging and Internet Services privatized.
»
Domestic leased circuit tariff reduced by 80% in last 1 year.
»
International Internet Gateway privatized-likely reduction in tariff. |
| | | INDIA:
Reasons for Outsourcing | | »
Largest English speaking and adequately qualified population after USA
»
The most preferred 'BPO designation' for corporate across the globe
»
Cost-effective manpower: Lower pay scales and a weaker currency make the manpower
cost
low
» India's unique geographical
position allows for leveraging time zone differences
»
Large presence of international technology vendors and solutions providers
» Basic, cellular, paging and Internet services have been
privatized
» IT is a major thrust area for Indian Government
- Separate Ministry of Information Technology
established for
this purpose
» 100% foreign ownership permitted in
IT Enabled Services industry unlike other sectors where
foreign
ownership is restricted
» Software Technology Parks
(STPs) established to provide ready to plug IT infrastructure and
telecom facilities As India emerges as a global outsourcing hub, the Industry
is forecast to explode at exponential rates - from 23,000 people and $ 10 million
pa in 1998 to over a million people and revenues in excess of $ 20 billion by
2008. Pivotal segments are Back Office operations, Medical Transcriptions, Insurance
claims Processing, Customer Interaction centres and Content Development. Current
trends suggest that the country is well on course. | | |
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