India would not have been the outsourcing destination if there were no one to offer them work. Of which US is the biggest customer with maximum work coming from US companies. So it becomes quite obvious to look into the reasons for such high rate of outsourcing.
One of the biggest factor which made outsourcing easier is the Internet. With the 2003 being declared as the year of broadband with the advancement in telecommunication companies were able to look for outsourcing business processes which were not possible earlier.
Internet spread around the globe like a wild fire. It provided the much needed connectivity between the customer and service provider who are in different continent altogether. It enabled the outsourcing parties to share document in real time, which eliminated some of the risks associated with outsourcing.
One of the biggest hindrance to outsourcing was the security threat. outsourcing companies were very concerned about the security of their data in the outsourced destination. And with most of the companies were involved in virtual business transactions this was a big concern. With the technological advancement and many security and access features installed in all the transactions and systems outsourcing was preferred over in-house operations.
There was always the business need and desire of outsourcing in a competitive market such as US from the beginning. And with the above factors facilitating the process US with its competitive market became the biggest customer of outsourcing.
Sunday, March 6, 2011
IT in India
As stated in earlier post India is one of the most sought after destination for IT related work. But this did not happen overnight. There are many factors over the years which has led to present status but major development happened in the 90s and early 2000s. Experts attribute these changes to three main reasons.
Y2K problem.This was one problem which held the It industry by the leash in the 90s. Every development, every process and every IT work was facing the threat of Y2K. This required massive amount of work and spending. So much of its work for fixing this problem was outsourced to India. Which gave the Indian IT industry its much needed break and international exposure.
Then came the IT boom which hit the US market in the late 90s. there was lot of IT works to be done and companies were looking for other options than the ones available in their own country. This was a good news for Indian IT companies as lots of work were bagged by them.
And the final push came in the time of recession in 2000-2003 period when lots of big players were looking for ways to cut cost to stay operational. Indian IT companies provided this solutions with their low priced services which the world promptly accepted.
After that Indian IT industry never let go of this opportunity and capitalized on their low cost and huge labor pool to stay ahead in this sector. Today even the multinational companies are opening their subsidiaries in India to capitalize on the resources which has propelled the Indian IT companies to their position today.
Y2K problem.This was one problem which held the It industry by the leash in the 90s. Every development, every process and every IT work was facing the threat of Y2K. This required massive amount of work and spending. So much of its work for fixing this problem was outsourced to India. Which gave the Indian IT industry its much needed break and international exposure.
Then came the IT boom which hit the US market in the late 90s. there was lot of IT works to be done and companies were looking for other options than the ones available in their own country. This was a good news for Indian IT companies as lots of work were bagged by them.
And the final push came in the time of recession in 2000-2003 period when lots of big players were looking for ways to cut cost to stay operational. Indian IT companies provided this solutions with their low priced services which the world promptly accepted.
After that Indian IT industry never let go of this opportunity and capitalized on their low cost and huge labor pool to stay ahead in this sector. Today even the multinational companies are opening their subsidiaries in India to capitalize on the resources which has propelled the Indian IT companies to their position today.
Thursday, March 3, 2011
Outsourcing
From the time when there was something resembling Industry there was outsourcing. It is the way society works. One man can not do everything. Which also implies to an organization. It may be good at multiple things but to operate they need to be good at more things. Which they cant be. So they find out some other group of people who are good in those stuff and then they take their service commercially. Which is cheaper than doing it yourself. This is outsourcing in a nutshell.
So it is of no surprise that the trend is followed in IT services as well. Over the time companies realized that they spend too much time, effort and money on IT processes and maintenance. So they start outsourcing, in their own country at first. But as the world became more connected through globalization companies started looking for option outside their country. Off shoring, as it is called, has caught the industry by storm. Presently almost all organization off shore their IT requirement. So much so that companies have opened their subsidiaries in these off shore location to stay competitive.
As far as IT off shoring is concerned India is one of the most sought after destination. And after economic reforms in 1990s the private IT companies have grown by leap and bounds. Infosys, TCS and Wipro are some of them to name a few. Which has allowed lot of IT related works to be transferred to offshore locations. Which also meant that there were lot of people who lost their jobs in the outsourcing countries.
So there has been a lot of debates going on whether outsourcing is good and should it be allowed at the cost of locals. Its a very tough call to make specially when there are more than one nations involved. We would like to see all aspects before we even try to make a decision.
So it is of no surprise that the trend is followed in IT services as well. Over the time companies realized that they spend too much time, effort and money on IT processes and maintenance. So they start outsourcing, in their own country at first. But as the world became more connected through globalization companies started looking for option outside their country. Off shoring, as it is called, has caught the industry by storm. Presently almost all organization off shore their IT requirement. So much so that companies have opened their subsidiaries in these off shore location to stay competitive.
As far as IT off shoring is concerned India is one of the most sought after destination. And after economic reforms in 1990s the private IT companies have grown by leap and bounds. Infosys, TCS and Wipro are some of them to name a few. Which has allowed lot of IT related works to be transferred to offshore locations. Which also meant that there were lot of people who lost their jobs in the outsourcing countries.
So there has been a lot of debates going on whether outsourcing is good and should it be allowed at the cost of locals. Its a very tough call to make specially when there are more than one nations involved. We would like to see all aspects before we even try to make a decision.
Introduction
Information Technology, more popularly known as IT has become the backbone of all the process in all industry. Be it manufacturing, research or human resource IT is relied upon for better efficiency and business solutions. IT has come a long way from simple data storage to complex analysis.
This has led to emergence of entirely new industry, new prospects for the graduates, new way of conducting business better. But as like all other things IT has its own share of hiccups and controversies in form of attrition rate, data security and job lay offs. Some implied some explicit.
IT is here to stay no matter what happens. So this is a small effort to understand it to stay ahead and get people understand the implication and development.
This has led to emergence of entirely new industry, new prospects for the graduates, new way of conducting business better. But as like all other things IT has its own share of hiccups and controversies in form of attrition rate, data security and job lay offs. Some implied some explicit.
IT is here to stay no matter what happens. So this is a small effort to understand it to stay ahead and get people understand the implication and development.
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