Part - I

As debates rage on across the globe on the economics of Offshoring work to India in the IT & ITES space, it is time to view outsourcing from the right perspectives. The Cost perspective is often harped upon by both Indian companies and their offshoring clients. However the root of Indian competitiveness in this space is not often discussed. This article only offers that historical perspective which will help us understand why China or APAC or East Europe cannot be as competitive as India for offshoring due to historical reasons.

"Outsourcing" or "Offshoring" is the system of packaging a set of your organization's tasks and hiring another company situated in another country to perform these tasks for you as a Billable Service. The service providing company provides you a dedicated workforce to perform these tasks for mutually agreed cost and quality terms.

Why India?

The crux of "Outsourcing" or "Offshoring" whatever you may call is "COST" and better operating margins for the companies offshoring to India, China or APAC. But "COST" and "PREDICTABLE & CONSISTENT QUALITY" would be more like it.

India has an edge because you have Decent Quality English Speaking people who are willing to do routine work ("Grunt Work") at a highly competitive price. As long as it maintains that edge, remains consistent and predictable, India has a place as the Software backyard of the world. A large IT Manpower pool, dominance of English in higher education system and a steady supply of Engineers only help to build India as a preferred choice for "Offshoring".

The reason why India is able to have such consistent IT & ITES workforce has nothing to do with India becoming a big power in the IT Space or brilliance of Indian Programmers or the fantastic engineers of our IITs. At the cost of revealing our "national secret" - it is a consequence of the McCaulay System of Education.

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* Contributed by -
Vijay V Bhat, an MBA from SCMHRD, Pune, having worked in Managerial positions in the Manufacturing sector, is currently working as a Consultant with a Hyderabad based IT company. The views expressed here are personal and do not represent his organization.