Outsourcing is now an all too familiar word in urban vocabulary. Since the beginning of the 21st century this business practice has become a popular strategic tool for many businesses, leading to the creation of an entire outsourcing based industry in countries like India and providing huge cost benefits to businesses. As the industry has grown, the kind of services off shored has also changed. Where once only non-core functions were being outsourced, today you have a lot of companies that rely on Indian expertise for software development and other skilled tasks. So why is off shoring a popular strategic tool? Why are companies now starting to build their own technology teams in India? Let’s look at some advantages of this practice to find out:
Cost Benefit – There is a huge difference between wages for professional developers in India and in the US. In fact, the wage rate is over 12 times more in the US. This is because there is a very large pool of human resources in India and not enough jobs and industries to absorb them all. This cost difference allows businesses to create large tech teams in India, at a very reasonable cost.
Wider Expertise – Another benefit related to the cost gap is that companies can afford to create large teams with different kinds of expertise at a very low cost in India. So you can have a more skill diversified team than you could afford in the US.
Time Difference – Some claim that the time difference between the US and India is a major disadvantage of off shoring to India but I consider that to be an advantage. The teams in the US and India complement each other. When the US team clocks out the Indian team gets busy resolving all of the errors and issues that cropped up that day. When the US team gets back in the morning, all the problems have already been solved. Think of it this way- Your Company is working almost 24 hours every work day, greatly increasing your productivity.
Enhanced Quality – When outsourcing first started gaining momentum it was used solely as a cost benefit strategy. The only work that was assigned to Indian tech teams was menial, repetitive tasks which needed no real innovation. This was because Indian tech teams were perceived to be not as skilled or competitive as US teams. All this has undergone a lot of change in the past decade and a half. In India there is a real focus on quality which has been developed gradually due to exposure to American and other western work practices. There was once a time that most Indian professionals were task oriented rather than process oriented. That is to say that they would complete the task assigned to them, but there was no question of displaying initiative and helping to enhance the overall quality of the service that they were delivering. This mentality has now changed with Indian Tech teams matching up to western professional standards, at one – twelfth the cost.