Offshore Outsourcing – Challenges In 2009

Found an interesting article on 2009 Offshoring challenges written by Maneet Puri - Director of LeXolution IT Services - have a look

The year 2008-09 has not been very good for businesses. With the global economic calamity and recession, businesses across the world have suffered severe damages. But the worst hit has been for the outsourcing industry. But the trouble doesn't end here. In fact, the offshore outsourcing industry has many other challenges staring at face. Here are some of them...

Recession

There was a time when offshore outsourcing was considered to be responsible for recession. However, at present economic recession poses as a severe threat to the outsourcing industry. Because of the bad state of American economy, Indian outsourcing industry that is almost solely dependent on the former has to face severe impacts. American companies have reduced their IT budgets and that leads to less (or no) work being outsourced to offshore continents.

Company Scandals

The Satyam debacle that happened recently made the whole world take notice of what has happened and question the ethics of Indian outsourcing companies. The scandal had exposed the dirty corruption practices of the industry and the international companies are much more skeptical about transferring their work to India now. The corporate governance of India is at question here and trying to gain back the confidence is quite a challenge.

Other Outsourcing Hubs

In addition to the sad market situation, there is also pressure of increasing competition. Though India is the world's favorite outsourcing destination, there are other emerging outsourcing centers like Philippines, China etc. Though Philippines is poor and lacks political stability, it is heavily banking on outsourcing to bring in country revenue. Like wise China, Russia and other countries of Eastern Europe are starting to compete with the service providers of India. In fact, China is on the second position after India in the field of offshore outsourcing.

Obama and American Policies

Obama has strong anti-outsourcing views and he has proposed the removal of tax benefits for companies that outsource their work to offshore continents. This would discourage more and more American companies to send their jobs overseas. This would add on to the already declined amount of outsourcing. The Indian outsourcing industry is faced with the huge challenge to overcome on this regards.

Indian Politics and Uncertainty

The general elections have taken place in India. And the new government has been formed. But it is yet to see the policies that are created for the offshore outsourcing industry. In fact, till the period of uncertainty is there, there will only be a skeptical attitude towards the outsourcing industry.

Indian outsourcing industry is going through a bad phase. It has all these challenges to cope up with and come over. But then again, the concept of offshore outsourcing has immense potential that cannot be undermined by any business. It is a powerful business strategy to cut investment costs and get access to high quality services and thus expand their profit margins. And this is something all businesses look forward to. Thus even in the wake of all these challenges, the Indian outsourcing industry has all the potential to come through unscathed.

Vote for “India – Still An Outsourcing King”?? YES / NO

When anyone talks about outsourcing, India's name comes up in mind as an undisputed King in Business Process outsourcing, Offshore Software Development and ITES. Due to new emerging countries in Outsourcing field now a question arises “Will India remain outsourcing King? “

In one of the best IT research magazine Gartner says, “In terms of offshore centers, India remains the undisputed leader, with China and Russia emerging as strong contenders” Gartner identifies the growth in offshore outsourcing to India and other developing countries as one of the most significant shifts in IT in the near term.

But competition in not over yet, another research magazine Forbes report says “similar low-cost technology centers in China, the Philippines, Malaysia, Russia and Pakistan are sprouting up and already competing for a share in outsourcing projects, making it increasingly unlikely that India can retain its "reign" as "the outsourcing king" for long.

The figure of $50 billion software exports by 2008 as predicted by Indian National Association of Software and Services Companies (NASSCOM) is too ambitious and may be difficult to realize. If India fails to meet this target, it may lose its competitive edge.

However, it is too early to speculate in those terms because under the given circumstances there is no threat to India's status in the outsourcing world and for various reasons the West will always prefer India over its rivals. In fact, it can boast of adding more feathers to its crown. What do you think, Will India loose his place in Outsourcing and Offshore Software Development?? Rohit Raghvendra Tripathi

Offshore outsourcing India

With the emergence of a number of countries in the field of offshore software development services, offshore outsourcing India has been gaining popularity. Worldwide, the business is growing at an increasing pace and India holds many advantages in terms of time zone, quality and cheap resources; and high English speaking population. Open source technologies like PHP are gaining importance and we have very good skilled resources available both in PHP and Dot Net technologies. Off late Indian government has taken many initiatives to make sure that software outsourcing to India grows rapidly. India is deep into custom software development with many world-class projects of web development. New areas like search engine optimization for company websites has become another popular domain in India. Many offshore companies are deploying Indian resources for their website optimization.

Specialized services like Computer Aided Design (CAD) and CAMM services in India and 3D design related projects have been accomplished with excellence. High-end website designing using flash and 3D has become very common. These designing services find many applications in the field of animated creations like movies, special effects and 3D gaming. Many companies have realized that offshore outsourcing of their core application development to India is beneficial and will fetch them faster turn around times and greater return on investment (ROI). Thus, it has become very attractive to hire Indian software professionals for either end-to-end development or product co-development. Many Independent Software Vendors are partnering with Indian companies for achieving success in their businesses.

Offshore Software Development

Offshore Software Development is provision of software development services by an external supplier positioned in a country that is geographically remote from the client enterprise; a type of offshore outsourcing. The main reason behind the companies to use offshore software development services is the higher development cost of the local service providers. The global software R&D services market as contrasted to ITO and BPO is rather young and currently is at early stages of its development.

India is the leading country in the Offshore software Development and Outsourcing software development . Other offshore software development destinations include Philippines, Israel, Republic of Ireland, Eastern Europe (Ukraine, Belarus[citation needed], Czech Republic, Poland, Hungary), Egypt, Argentina.

In India, offshore software development can be performed in all major cities and regions of the country. The cities are categorized into Tier 1, Tier 2 and Tier 3. Bangalore, Mumbai is in Tier 1, Hyderabad, Chennai, Pune, NOIDA, Gurgaon, Navi Mumbai is in tier 1-1, Kolkata, Mangalore, Mohali/Chandigarh, Bhopal these reigons are in tier 2, and Coimbatore, Mysore, Nasik, Kochin, Nagpur, Indore, Jaipur, Kanpur, Patna these all in tier 3.

So india’s future is Very Bright in Offshore Software Development and Outsourcing software development