Offshore outsourcing of IT and business process outsourcing (BPO) is known to be the practice of hiring an external organization to perform some or all business functions in a country other than the one where the product or service will be sold or consumed. “In 2005 IT and BPO were estimated to have generated revenues of $36 billion contributing nearly 5% of the GDP” (“Virtual,” 2006, p. 1). It is very clear that BPO has transformed into a very large and profitable business, with “India leading the way by providing $7.5 billion in BPO revenue this year. India’s outsourcing capabilities have grown steadily throughout the last decade” (“Turning India,” 2006, p. 1). “In the 1980’s outsourcers in India did low skill jobs such as data entry and some software development. In the 1990’s they expanded by doing larger software projects, taking over entire IT systems and back office functions such as accounting for U.S. and European corporations ” (“Offshoring,” 2006, p.1). “Indian IT grew on the relatively humdrum software work needed to fix the Y2k millennium bug at the end of the 20th century. It then received a boost from the dotcom bust, which in many firms in America and elsewhere caused IT budgets to be slashed, prompting outsourcing to India for a lower price” (“Virtual,” 2006, p. 1). The India of today has taken on new challenges and more sophisticated services such as engineering, research and development, and designing auto parts, and chips for wireless service (“Offshoring,” 2006, p. 1). “Now Indian firms can perform almost every service offered by the global giants of IT outsourcing and India’s core business remains “ADM” which is the application, development and maintenance of software, which accounts for about 55% of exports of IT services”(“Virtual,” 2006, p.1). Tata Consultancy Services, Infosys, and Wipro are the three largest Indian IT service firms in India, “Each are recruiting and hiring more than 1,000 people per month” (“Next Wave,” 2006, p. 1). J.P. Morgan Chase, a large investment bank in the U.S., plans to double its staff to 9,000 in the near future. These new employees responsibility will be to settle complex structured finance and derivative deals (“Next Wave,” 2006 p. 1). These new investments all show that India has moved into a third stage of the great Indian services-export boom. In the first stage, “firms such as Tata developed world-class expertise in software application development, and maintenance.
In many cases outsourcing has proven to be beneficial for businesses. It can help a business’s management by allowing executives to focus on the core structure of the firm rather than every specific element. Production, manufacturing, or additional servic...
Since the concept of outsourcing was introduced it has been a subject of debate between politicians and citizens of the United States. Remarkably, it was the United States who supported outsourcing and now it is the United States that feels its economic progress is being threatened by outsourcing. One may argue that the financial situations that existed two decades earlier are not the same as they are today, thus the change of time, business priorities of economies have also changed.
The exporting of American jobs is an issue that is important and will become increasingly so as more and more white collar jobs are shipped overseas. American companies in the past few decades have been sending American jobs overseas paying residents of other countries pennies on the dollar what they had paid American workers to do. This saves the companies millions of dollars on labor costs but costs Americans precious jobs.
Where do you start? Developing the conceptual model for business outsourcing is relatively easy as compared with legal outsourcing. The difficulty lies in executing it. Why? For the same reason it's difficult to run a business - because you've got to manage strategy, structure business processes, applications, infrastructure, and the culture all at once. The latest trend which dominates offshoring legal support services is the spreading of legal web across the world and extending legal services to the advantage of the client. As the legal market across the globe becomes more and more competitive, increasing number of international organizations seek state-of-the-art legal LPO services to meet the rising demands of quality and cost effectiveness. The complexity of BPO is daunting, and that's why it's so difficult and so rarely done well.
Outsourcing has only very recently become an issue in the United States, and as a result it has become a very popular political issue during campaigns for presidency. Outsourcing is the idea that a company will subcontract to a third party, usually outside of the US, for various parts of its business structure. An example of this and perhaps the largest source of outsourcing is call centers for tech support, where a company will subcontract to a third party and that party will build up the call center and hire the workers for it. Many people have been affected by outsourcing since it started being used widely in the 1980s, and most would argue that outsourcing is not a good business model, that while it not only negatively affects them, it affects the whole economy. While there are some unmistakable positives to outsourcing, I would argue that as a whole, the negatives far outweigh the positives and outsourcing is bad for the United States.
[6] Kripalani, Majeet & Egnardio, Pete. The Rise Of India. Business Week Online. December 8, 2003. http://www.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
After completing my graduate degree, I joined Tata Consultancy Services (TCS), Asia’s largest software firm as an Assistant Systems Engineer. After a 3 month intensive training in software methodology and management skills, I joined a team which was building a Trading System for a Stock Exchange...
The market for IT industry was huge and expanding at a fast pace. However the market leaders were Accenture and IBM which had a negligent market share and rest was captured by small enterprises. Indian companies also ventured in the industry and due to their competition, IT multinational giants had to increase their base in India. Due to high opportunities, attrition rate was also high in this industry. As a result Indian companies like Wipro, Infosys increased their base level salaries. During this phase, Indian economy was transforming towards an era of information and knowledge. This can be seen from the fact that contribution of services towards the economy’s GDP was higher than 18% in 2001 as against in 1980. No other industry had done better standing against global competition. The annual exports had always been over 50% over a decade. U.S.A. share represents highest with 61% and about a third of Fortune 500 companies outsource their software work to India. To foster development, Indian government has taken a number of steps like liberalization of policies and providing necessary capital and infrastructure to foster growth. Thus Indian environment has been conducive for growth. (Ref: Indian Embassy.org) Competitor analysis- The market for IT industry was fairly competitive with IBM and Accenture as global leaders and rest of the market was pretty diffused. IBM and Accenture had strong brand and a global presence with a large customer base. They also offered panoply of services viz. technology implementation, business consulting, offshore services, customer relationship management etc. Both offered breadth and depth of services. IT market in India offered technical and business consulting with Tata Consultancy Services which was the market leader in IT exports and Wipro Technologies and Infosys being other major market players. TCS offered consultancy services, IT services, asset based solution etc. Wipro was third largest IT provider with service offerings in IT consulting, software solutions, BPO etc. Both had a strong global presence. Intensity of Rivalry: Rivalry amongst competitors was pretty intense as can be seen the Indian competition caused IBM to increase their presence in India. However leaders like IBM and Accenture had a wide range of service offerings so competition was only amongst few sectors. Rivalry was to hire the top talent as human capital is the most important thing in the IT sector. This is the reason that attrition rate lead to a rise in pay packages.
India’s manufacturing sector is an important cog in the wheel of economic progress and development; the segment’s contribution to the Gross Domestic Product is 16% ( India Brand Equity Foundation, September 2013). Post economic liberalisation era, India has realised the important role of manufacturing industry in the overall industrial development. In this context even the government has been very proactive. The recent initiative counts back to the announcement of the manufacturing policy in 2010, followed by the systematic manufacturing plan for the country with the intensive industry involvement design. Both the government and the industries are focussing on the implementation of this plan.
The main problem Bharti Airtel Limited facing is "How to manage its capital expenditures for its operations and how to face the expected exponential growth and a competitive environment." The challenges that the company is facing are
The practice of outsourcing jobs is not a new concept. People have been outsourcing jobs for decades. Some people even offshore outsource jobs. There are many opinions to offshore outsourcing based on how it influences the economy. Some people are in favor of outsourcing jobs and some people are against outsourcing jobs. People need to get educated about the great impacts that offshore outsourcing does to an economy. The global economy has started to thrive and offshore outsourcing has profited the consumers as companies want to cut costs and competition, which is why I support offshore outsourcing jobs to foreign countries.
Machiraju, H. R. , 2002. International Financial Markets And India. 1st ed. New Delhi: New Age International.
Tata Consultancy Services established in 1968 and headquartered in India, is a global IT service provider and stands amongst the top 10 organizations of the world. With an experience of 40 years and a strong presence in 55 countries they have grown with service and success by providing a world class experience to its clients from time to time (Tata Consultancy Services, 2013).
In India’s highly competitive market Bharti must be mindful of how to keep its core competency ahead as well as trying to develop new ones.
Infosys was founded in 1981 by Narayana Murthy and his six colleagues, they shared a vision of providing “a fair deal to the stakeholders: shareholders, employees and customers alike” (Evans & Barsoux, 2002, p.61). Infosys’ vision was to regain the top position for the Best Employee and Best Performer Company by 2007 (Delong, 2006). The head of HR leadership Hema Ravichander recognized that Infosys had some HR problems: From 1981-1991, Infosys had only one client and the organization was almost dissolved because of the bureaucratic and regulated Indian environment. Murthy was able to save the organization by energizing the rest of the co-founders (Delong, 2006). In 1991, Infosys shifted its focus from “Body-Shopping to Off -shoring” (Delong, 2006, p.4) at the same time India was facing economic liberalization. Infosys introduced off- shore development Center known as ODC and also introduced Global Delivery Model (GDM) which is a project management system. GDM afforded the organization to divide each project into components that was executed “independently and concurrently” at client site from remotely development centers.