India Outsourcing Facts

According to International Data Corporation (IDC), US-based companies will triple their offshore outsourcing spending from $5.5 billion in 2000 to more than $17.6 billion in 2004! The offshore outsourcing trend has crossed all the barriers of political turmoil, language and culture difference and has proved that no matter in which part of the world your service provider resides, what really matters is industry-standard, high-quality service together with decisive cost-advantage. But for quality and on-time delivery of offshore outsourcing services to a client, the offshore outsourcing service provider has been dependent on numerous delivery models that have evolved since the last one-decade. The distribution of activities across the various delivery models may vary from one project to another. This may be:

• Revenue from the Indian IT industry has grown tenfold in the last decade from $4.8 billion in 1998 to $47.8 billion in 2007, according to the National Association of Software and Service Companies' (NASSCOM's) Strategic Review 2007. Services and software exports, the mainstay of the industry, is expected to register a 32.6 percent growth for a total of $31.3 billion in revenue. Looking just at exports, India saw its revenue grow from $12.9 billion in 2004 to an expected $31.3 billion in 2007.
• India is the world's leading offshore services location according to the Global Services Location Index, the latest annual survey by global management consulting firm A.T. Kearney.
• India, closely followed by China, continues to lead the Index by a wide margin, with declines in cost advantage offset by further improvements in talent supply and business environment.
• The survey also indicates that globally the wage cost advantage of offshore locations for office services is set to last for another 20 years.
• Even though wages in offshore locations for services, such as IT, business processes and call centers, have started to rise, they will remain cheaper for the foreseeable future under the most aggressive projections of wage inflation and currency appreciation in developing countries.
• The labor cost changes are partly the result of accelerating wages and currency appreciation in offshore hotspots, as well as downward pressure on wages in impacted sectors in developed countries.