Is Indian Offshoring Advantage For Eternity

Maveri

Offshoring
Offshoring describes the relocation by a company of a business process from one country to another. Offshoring refers to taking advantage of lower-cost labor in another country.

Why Outsource Your IT?
Each firm has their own internal motivations for considering an Outsourcing Strategy • “IT is not my company’s core competency, we need to focus on what we do” • “My company is overspending to maintain its IT Resources” • “We need to be more agile in our IT Initiatives

Wh y?

q30-50% cost reduction for off shored process qFaster and Better Communication qLow Attrition rate

qAccess to talents qThe Advent of Globalization qHigh skilled Labour qEnglish Advantage

India’s Value Proposition
ity
Fl ex i bi li

iv

Qu a

lit y
ty

Co st

qFaster turnaround time q24 ×7 service qLearning effect /specialization

Pr

od uc t

qIT Optimization

qEase of rampup & down to reflect business volumes qFlexible, results-driven engagement models qReduction of

6

9

During NIGHT making and taking calls from the clients and it’s customer

During DAY time processing of the data.

24 Hours

Source : GSLI Index (2007)

Source: Census Survey, 2005

17

9

Edge over age
ChinaMale 2008 Female Male India-2008 Female

Population in (millions)

Population in (millions)

11 19 Source: US Census Bureau, International Data Base,

India continues to rank as the preferred destination… Likely to benefit disproportionately from Offshoring Drive
India - the Preferred Offshore Destination
Vendor Sophistication (Number, Quality)
Indi a Philippin es

2004

2008

China CIS Mexic o

People Sophistication
(Number, Cost, Language Skills)
Irelan d Isra el Singapo re

C ost

Mexic o Hunga ry Chin a Malays ia Philippin es Russi a

Indi a

India Low Cost High Quality Developme
Source: Nasscom

Quality of Supply
(Resource Availability, CMM Level, Cultural Fit)

Source: McKinsey-NASSCOM study

What it is in India?

Export of offshore services

Source: NASSCOM, Strategic Review 2005

Wh y? Chosen for

INNOVATION OF OFFSHORING

THE NEW 3 DIMENSIONS OF OUTSOURCING

LP O EP

20 37 Source: Evalueserve

KPO Trend

21 38 Source: Evalueserve

Growth engines..
• The labour factor • Time factor • The large talent pool

Talent pool
• 19 million students are enrolled in high schools • 10 million students in pre-graduate degree courses • 2.3 million graduates (4,41,000 engineers) • 0.3 million post-graduates

27

33

Th e

Significant cost advantage
qLabor

qCapital

q Labor management

''Offshore outsourcing was triggered by the intention to cut costs, but now it's not just driven by cost factors,'' Karnik,President, NASSCOM
Source: Giga Research, 30 23 a wholly owned subsidiary of Forrester Research Inc

Relationships with Software
What is a Software Technology Park? • Subsidized real estate • Tax Breaks • Affordable housing • Legal and Accounting services • Close proximity to fellow IT Firms • Assistance with funding and attracting FDI • Close proximity to technical schools and universities The india have paid close attention to the success of U.S.

Highlights of STPs
• 100% foreign equity is permitted. • Import duty exempted. • Permitted to the domestic market. • Tax benefits.

RURAL INDIA

Conclusi ons
•We are only at the start, and not at a mature state, of the offshore industry evolution. •The pace, breadth and depth of offshoring business is rising. •Global demand will exceed near-term suitable talent supply in every country.

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