Why To Outsource And Why To Outsource To India

I will start by explaining you the philosophy behind business outsourcing. It is “do what you do best and leave the rest to Business Process Outsourcing (BPO) companies. Companies outsource all their non-core business to Business Outsourcing, in order for them to save management time as well as resources. They can then focus on developing their core competencies.I will state some of the newest and most common tasks that are today being outsourced to BPO companies. These are: Human Resource Management, Internal Audits, processing payrolls and accountancy. The classic ones dealt with by call centers is providing customer service through hot lines, reservations…One of the most important objectives for managers is to maximize shareholder value. To achieve that, they will cut down costs. Outsourcing is known to be one of the ways used to cut down costs. Mckinsey has estimated that US companies which develop new drugs can save up to $600 million by outsourcing the development work to India’s BPO companies.Outsourcing companies also help you in that they manage your risks. You will not have to worry about your technology becoming obsolete not about chasing new technologies. If you outsource, you will be covered if the government or other regulating bodies change the rules and regulations that actually prevail.You should be aware that the initial costs involved when you outsource to India are very prohibitive. Do not let those training and infrastructure setup costs discourage you. Dell, HP and IBM have outsourced to India and are making huge amounts of profits. Let us see why they chose India…India boasts to have the largest pool of qualified personnel and that is true. Every year 180,000 engineering graduates join the labor market. Google has announced that its decision to setup a center in Banglore is more motivated by the largest pool of skilled people than the financial aspect.Though there is actually a very good telecom infrastructure in terms of ISP and cellular networks, the government has voted a new National Telecom Policy and encouraged private companies to engage themselves in the telecommunications sector. The excellent submarine and satellite connection provide you with a good high-bandwidth connection to the rest of the world.The stable pro-IT government has voted several bills that will support the growth of the BPO sector. As one of its objectives is to increase Foreign Direct Investment, the government provides several incentives to encourage investors to setup there. Some examples are 10 year tax holiday, deduction from expenditure…Furthermore, you do not have to worry about the legal aspect as India is often changing its laws to be inline with the international laws and practices such as the World Trade Organization. You can also decide which laws will apply and state that condition in the contract binding you with the outsourcing company. You can for example state that in case of litigation US Laws will apply. You therefore don’t have to learn or worry about India’s legal system.