The Business of Offshore Outsourcing in India

The Business of Offshore Outsourcing in India

Length: 850 words (2.4 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓
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.

How to Cite this Page

MLA Citation:
"The Business of Offshore Outsourcing in India." 123HelpMe.com. 27 Jan 2020
    <https://www.123helpme.com/view.asp?id=151894>.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Essay about Outsourcing Of Outsourcing Into Their Business Practices

- Today, many businesses have adopted the practice of outsourcing, be it within the borders or done internationally. Outsourcing can be defined as “the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual” (entrepreneur.com). “Outsourcing has become a major trend in human resources over the past decade. It 's the practice of sending certain job functions outside a company instead of handling them in house....   [tags: Outsourcing, Offshoring, Wage, Employment]

Research Papers
1200 words (3.4 pages)

Outsourcing And Outsourcing : Outsourcing Essay

-   Pros and Cons of Outsourcing and Offshoring Businesses face lots of challenges today during their development and growth, and they should decide how much financial investment are they want to put into the development of certain projects. When they make decision, business owners find the idea of developing an in-house team dedicated to certain project much more expensive than the company’s current situation can control. That’s why they turn to find alternatives. In many cases the alternative is finding someone to do it for you at lower costs....   [tags: Outsourcing, Offshoring]

Research Papers
972 words (2.8 pages)

Essay on The Outsourcing of Software Development work to Offshore Jurisdictions

- In today's global economy, the outsourcing of software development work to offshore jurisdictions is a strategic tool that can provide a competitive advantage for many companies. In addition to the main goal of cost savings, outsourcing can also development technologies, provide access to world class expertise , and allows a corporation to focus on its business activities and core competencies. According to Barney (1986), competitive advantage can be attained if the current strategy is value-creating....   [tags: information technology and data management]

Research Papers
1099 words (3.1 pages)

The Outsourcing Of Outsourcing Jobs Essay

- 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....   [tags: Outsourcing, Offshoring]

Research Papers
1873 words (5.4 pages)

Offshore Outsourcing: Good or Evil? Essay examples

- Economic experts have noticed a trend in certain industries in recent years – there is an increasing number of businesses hiring workers in foreign lands, especially India and other Asian nations, to perform work that has traditionally been done by Americans. This trend had been particularly noticeable in the field of information technology, where most analysts believe salaries have been negatively impacted by this practice, known as “offshoring” (“Offshoring Eats”). Since information technology lies at the heart of business in the modern world and plays an integral part in most scientific research and technological innovation, any development that affects information technology as deeply as...   [tags: Outsourcing, Offshoring, Free Trade]

Research Papers
2173 words (6.2 pages)

Essay about Offshore Outsourcing

- Outsourcing is simply the farming-out of services to a third party. Offshore outsourcing is majorly used in IT related task for which internet plays a vital role along with work related to sales & marketing, finance, human resource & administration, etc. Quality and effective risk management are two integral parts of offshore outsourcing services. Offshore outsourcing allows businesses to reduce costs, gain staffing flexibility and increase revenue, gain competitive advantage, decrease cycle time, increase shareholder value, improve customer loyalty and ultimately allows a business to focus on its core competencies....   [tags: Business Essays]

Research Papers
1451 words (4.1 pages)

Essay about Offshore Outsourcing

- Abstract This paper will discuss offshore outsourcing and the effects it has on the American worker in a technology environment. We begin with the scope of the problem and how it has changed the economy for better and for worst. Various figures representing miscellaneous data about off shoring will be represented. The topics include the background and nature of offshore outsourcing, reasons for outsourcing, why trading promotes gain, current economic standing from outsourcing, and finally how outsourcing affects wages and employment....   [tags: Business Management, Globalization]

Research Papers
1704 words (4.9 pages)

Offshore Outsourcing Essay

- Offshore Outsourcing Currently, it has been reported that many of our jobs, as much as one out of every three private-sector jobs are being sent overseas. What is offshore outsourcing. Outsourcing occurs when a firm subcontracts a business function to an outside supplier. Outsourcing is mainly the result of companies who will always pursue the lowest-cost structure, which means less skilled work will move out of the U.S. to emerging economies. Many believes that this is a good thing, because living standards around the world will rise, and workers in developing nations will get new and higher-paying jobs, and consumers in the U.S....   [tags: Outsourcing Economics Economy Essays]

Research Papers
1674 words (4.8 pages)

Outsourcing China Essay

- In recent years, China's service outsourcing have been expanding from scratch, and gradually expand the field, scope of business mainly related to Information Technology industry, producing services, as well as cultural and creative industries, the target involving Japan, Korea, Europe, America and India. In Shanghai, Beijing and other cities formed a group of outsourcing industry cluster, with significant economic benefits of international service outsourcing park; local outsourcing companies grew rapidly, and gradually change the pattern of the first to foreign-based....   [tags: outsourcing, chinese, Globalization]

Research Papers
1008 words (2.9 pages)

Business Outsourcing Essay

- Outsourcing to foreign shores, or offshoring, is an idea that has long been in practice, yet meets resistance when American business seeks to send jobs overseas. Sending jobs overseas may help a faltering American business keep their doors open and keep more important jobs open for American workers. Outsourcing has been a business practice for hundreds of years. Adopting legislation to curb Offshoring will limit American businesses competitive edge, one that helps small business thrive and grow, and helps big business to plant an American flag in the international business of offshoring....   [tags: International Business FDI Foreign Direct Investme]

Research Papers
1593 words (4.6 pages)

In turn, these low cost developers became excellent business partners of many U.S. firms” (“Next Wave,” 2006, p. 1). In the second stage, “Indian forms and the local operations of multinationals started offering low skill back office services that could take place globally thus came telephone call centers, medical records transcription, insurance claim processing” (“Next Wave,” 2006, p. 1). In the third stage, “In both IT and BPO more sophisticated functions are happening” (“New Wave,” 2006 p. 1). With more sophistication comes higher revenue. (“Next Wave,” 2006, p. 2). The growth in Indian exports is expected to come from the software market, and IT outsourcing or remote management of whole systems, which now is a market dominated only by big global IT consulting agencies. By the year 2010 it is projected that in BPO the largest industries will remain banking and insurance, with quick growth in other areas such as legal services (“Next Wave,” 2006, p. 2).
There are some concerns for the Indian IT and BPO market. “With a projected 2.2 million people estimated to be working in the industry by the year 2010 there will only be 1.05 million suitably qualified college graduates between now and then” (“Next Wave,” 2006, p. 2). According to Jayant Sinha, “ I believe the education system can be fixed in time to plug the gap” (“Next Wave,” 2006, p. 2). Jayant believes, that more important is the lack in urban infrastructure, or in simpler terms space. “ IT and BPO will need about 150 million square feet of office space by the year 2010. This is the equivalent to Manhattan” (“Next Wave,” 2006 p. 3). With the need for more office space comes the construction of new office buildings, construction is not only underway in the leading IT and BOP cities of Bangalore, Mumbai, and Delhi, in India but, construction is also underway in smaller cities known as “second tier” they are Pune, Hyderabad, and Chennai.
In conclusion, the expansion of IT and BPO are inevitable. “Spending on offshore IT will nearly triple in six years to approach $60 billion by 2010” (“Next Wave,” 2006 p. 4). With that in mind, will India remain the global leader in IT and BPO?


References:
Dolan, K. (2006). Offshoring the offshorers. Forbes, Vol. 177 P. 1-3, Retrieved December 1,
2006 from: EBSCO MasterFile Premiere.
Lakshman, N. (2006). Turning India outsourcing units into cash. Business Week Online.
Retrieved December, 1, 2006 from: EBSCO Academic Search Elite.
The next wave. (2005, December, 17). Economist, Vol. 377, Retrieved December 1, 2006
From: EBSCO Academic Search Elite.
Virtual Champions. (2006, June, 3). Economist, Vol. 379, Retrieved December 1, 2006 from:
EBSCO Academic Search Elite.
Return to 123HelpMe.com