Outsourcing India – Retaining its Competitive Edge

History is full of fallen giants. Whether it's empires, countries, or businesses, there are plenty of examples of something getting to a dominant position and then losing it. The lesson, perhaps, is not to assume that being on top now means that it will be possible to stay on top forever. And, for those trying to compete with India in outsourcing, there might be some hope in those examples. But, despite this, India does not show any signs of being toppled as the outsourcing world-leader, at least not in the near future. It was the birthplace of modern IT and Business Process Outsourcing (BPO) in the early 1980s. And, in subsequent decades, it has created the US$250 billion outsourcing market. “For many, outsourcing to India is the standard,” says Ralf Ellspermann, CEO of PITON-Global, an award-winning call centre in the Philippines.

Today, a company looking for an offshore IT or BPO partner will struggle to find anyone that can match the depth of experience that India’s leading outsourcing providers can provide. And, as the market expanded, both in size and scope, it was natural to think of outsourcing to India as the first choice. “India, for example, is globally recognised for its expertise in IT and software development outsourcing. Something that would have been unimaginable in the early days is now commonplace, thanks to the strength of India's IT providers,” says Ellspermann.

India's biggest advantage is its size. Having been the first to start, it has had more time to grow, but it also has more room to grow. Other countries trying to compete must accept that with a population of nearly one-and-a-half billion people, India's ability to scale its outsourcing sector staffing might as well be considered as limitless. However, the sector's overall growth has meant that there has been room for competitors to emerge, and there are some signs that India might be struggling to maintain its massive lead. One of the biggest problems it has is infrastructure. Outsourcing often requires excellent communications links, and in a largely rural country, these are all in India's metropolitan centres. Some providers find it hard to find suitable locations to expand, and the government is struggling to meet the ever-increasing demand for upgraded communications infrastructure.                                                         

Perhaps the increased demand for specialisation poses the biggest risk to dominance. Just as it has developed a reputation for IT, other nations have used their natural advantages to find niches thanks to an excellent education system. “An excellent example of this is the Philippines, where the population boasts an incredibly high level of English proficiency. With low labour costs and a large pool of highly educated workers, the Philippines has been posing a threat to India’s dominance in some areas. For the last decade, more businesses have chosen to outsource their call centre and back-office requirements to the Philippines than India,” says Ellspermann. As a response, some of India’s top outsourcing providers have established service delivery centres in the Philippines, employing more than 100,000 Filipinos. Outsourcing to India may not always be people's first choice anymore, but the Indian sector is not quite ready to give up its lead.

 

(Brand Desk Content)