Why India Has Become the Premiere IT Outsourcing Destination of the World?

Why India Has Become the Premiere IT Outsourcing Destination of the World?

With increased globalization, outsourcing has emerged as a trend having a lot of potentials.

It has become popular because of cost-saving and high returns.

Besides this, offshoring also offers a skilled workforce and on-time delivery.

Over the years, India has managed to evolve as the best outsourcing destination across the globe.

According to A.T Kearney Global Service Location Index 2019, India is ranked number one when it comes to attractiveness for outsourcing.

Many offshore development companies cater to the requirements of different countries across the globe.

Besides that, many eye-opening statistics will make you believe that India is a country that you should consider for outsourcing your project.

The Deloitte study, conducted on various global businesses claimed that more than 59% of businesses are successfully outsourcing their products to India already.

And 22% of them are right now planning to outsource in the coming future.

India Outsourcing Statistics to Consider

India has the largest pool of talented people and it is what drives the business to the country.

Here are the numbers that will certify prove that India is the best outsourcing destination in the world:

  • India is the second-largest country when it comes to the population by having 1.33 billion people. From which there are 100 million English-speaking people in the world. 
  • By the end of 2020, it is estimated that India will have more than 2 billion English speaking people. 
  • There were 15 million graduates last year and over 300,000 post-graduates from India. Plus, 1.5 million engineering graduates that pass out from Indian engineering college every year. 
  • More than 4 million IT professionals are working in Indian IT companies and 10 million indirectly.
  •  Over 200,000 IT graduates are annually added to the IT workforce in India, and this makes it the youngest employable population globally. 
  • In the next 4 years, more than 40% of the IT workforce will train themselves as per the in-trend technology-stack in order to meet the advanced requirements of the industry. 

These reasons are quite strong to make you start outsourcing IT services to India. 

Reasons to Outsource to India

As businesses have expanded globally, outsourcing relationships have undergone a sweeping change.

Although cost remains a crucial consideration, another important aspect is the increased focus on value-add and product quality. 

Following are the reasons why innumerable companies outsource their projects to India:

a) Software Industry Size

A country having a massive population also has a big size of the Indian software industry which is even bigger than entire Europe. 

In the financial year 2019, the IT industry has generated annual revenue close to 180 billion US dollars. This is a significant increase in revenue ten years ago. 

This clearly depicts that software outsourcing in India is a globally proven model as there are many Indian companies that have mastered successfully in delivering great projects.

b) Skilled Workforce and Best Companies

Another major reason to outsource in India is that many Fortune 500 companies like Cisco, Microsoft, Google, Walmart have their office in the county. 

Companies like Accenture, IBM, Infosys, TCS and HP are big names in the technological industry.

In 2017, the industry provided direct employment to four million individuals and indirectly to over ten million. $20,000 worked for Tata Consultancy Services and 228,000+ worked at Infosys.

The revenue of TCS reached 1.5 trillion Indian rupees in 2019. This made it the largest India-based It company that particular year. 

This particularly depicts that the talent pool in the country is quite mature having proven experience of collaboration across the globe.

c) Round the Clock Services

Companies that are in a different geographical location prefer Indian offshore companies as they get round-the-clock services.

Their in-house team can work during the day on a particular project and when their working hours end, the offshore team starts its work.

This ultimately speeds up the work process in an efficient and controlled way.

d) Cost-effectiveness 

Cost is the primary reason to outsource a project to any country.

Do you know that India has the highest number of ISO-certified firms in the world? Yes, that is true. 

In the US if you hire a developer it may cost you $80 per hour which is quite costly. On the contrary, an Indian developer charges $15/hour. 

Less cost has a direct impact on increased ROI. Instead of hiring in-house or freelancers from other countries, it is recommended to hire dedicated Indian programmers.

They offer not only flexibility but also capital expenditure reduction on infrastructure and maintenance by a considerable margin.  

Recommended Read: Cost-Benefit Analysis of Outsourcing: India vs USA

e) Massive Support from Indian Government

Information & Technology offshoring companies have shifted their approach from plain basic agreement to tailor-made agreement that focuses on nice expertise.

One of the most common approaches is sharing risks and responsibilities. From a legal perspective, when a software development company acts as a service integrator, then an important part is aimed at procurement related to the clauses. 

What actually works for Indian outsourcing is the massive support that it receives from the government.

Here are a few acts that make it worth outsourcing

a) Information Technology Act 2000 (IT Act)

The Informational and Technology Act is an important piece of legislation for outsourcing firms.

It is relevant for e-commerce entities that deal with online transactions, data protection, cybercrime, electronic communication, and storage information.

The implications under this Information and Technology Act are significant considerations when drafting an outsourcing contract in India.

The cross border transfer of sensitive data is a major concern.

So, it is subjected to the rules and regulations framed under the IT Act prescribing certain security standards that should be followed by parties. 

b) Legal or Regulatory Restrictions on Data Processing 

In the absence of a specific law regarding data processing and security, the provision related to data protection is governed under the IT Act.

This IT Act defines “reasonable security practice and procedures” in order to protect information from unauthorized access, damage, and modification.

The Information Technology Rules 2011 (SPDI) is framed under the IT Act that gives an exemplary standard of reasonable security practice.

This includes the provision of privacy and data policies to be followed by corporate entities. Sensitive personal data and information are clearly defined in the SPDI Rules.

This includes information related to password, bank account details, credit/debit card numbers, etc. 

When it comes to handling personal information, the IT Act and SPDI Rules have strict regulations for the collection, storage, usage, purpose of storage and disclosure to third parties.

The disclosure of data to the third parties required a clear understanding and explicit consent of the information provider. 

c) Regulatory and Legal Environment: Indian Contract Act, 1872

This act is applicable to any contractual arrangement that is part of the Indian party or Indian and foreign company.

This act provides elements of valid contract and remedies if there is any breach in terms of the contract.

As the governing law, the companies have to agree on the terms and conditions related to the consideration, warranties, indemnities and other relevant clauses.

What IT Services are Outsourced to India?

There is a long list of services that IT companies outsource to India nowadays.

Whether it is web development, mobile app development, quality assurance, India is one of the best countries to choose for all your outsourcing services. 

However, the diverse pool of talent is attracting different companies from the various ends of the globe to avail the It services from India.

The range of IT services is vast and companies can outsource a number of services in the domains. 

Here are the commonly outsourcing services in India:

a) Web Development Services 

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Outsourcing web development to India helps you in shifting the focus to what you do the best.

Let the specialist handle the web development task and make it more responsive. 

Many offshore web design and development services offered are from skilled and experienced Indian developers.

Quality analysts, e-commerce developers, design and project managers, this is the right combination.

This team allows you to avail the best benefits and customized web solutions based on the business requirements.

You can:

Besides the benefits of less cost, flexibility and high productivity, there is a long list of long-term benefits that makes outsourcing software development to India lucrative. 

Outsourcing web development services to India is one of the most preferred choices of companies.

There are plenty of reasons to outsource web development to India. Some of them include quality, cost-effectiveness, technology, specialty and more.

b) Mobile Application Development Services

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Every business demands to develop beautiful, innovative, and high-performance based on mobile applications.

If you are a startup that has a mobile app idea, outsource to Indian developers so that they can help you get all the required features and functionalities.

Whether you want native app development, cross-platform app development, everything can be done in a hassle-free way via outsourcing. 

The mobile app development team India works on your project to make it an intuitive app.

Plus, you can check real-time updates regarding the status of your app as you track the Indian offshore developers.

User experience plays a major role during mobile app development whether it is Android or iOS.

Indian app developers (whether iOS or Android developers) ensure that the mobile apps created by them work efficiently.

And this is accomplished by executing the right UX design and outline as per the operating system guidelines while keeping the user requirements in mind. 

c) Enterprise Solutions 

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Every enterprise has to undergo a digital transformation so that evolving technology has a competitive advantage.

Whether it is application modernization, migration, consultation, system integration or different maintenance and support to digitize enterprise.

Various outsourcing enterprise solutions can simplify your digital transformation. 

Outsourcing to India allows companies to focus more on their core business, it increases profit.

A connected economy with a digital-ready population, India is the go-to-place for enterprise outsourcing.

Staying ahead of the curve in the development, India has a matured market when it comes to delivery on time.

d) Product Development

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Another important service that organizations look for is product development outsourcing that helps companies get a product developed.

You can also ask for a prototype or MVP before creating the final product. 

Outsourcing is the best way to recognize the operational work process that lets you pay attention to the important tasks.

Whenever you outsource your task or project to India, a development team is capable to work as per your time-zone.

In some cases, leveraging the time zone benefit in order to deliver work in a shorter time period.

e) Digital Marketing Solutions

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When you are a part of the digital ecosystem, it is important to market your product or services effectively.

You should brand your business, and create a presence in order to become visible.

Leave a strong impression on your customers globally. This is the reason you require digital marketing services.

Getting outsourcing services from India, helps you strengthen your online presence thereby boosting online visibility. 

Now, when you know about the services that you can outsource to India let’s see how to look for a reliable outsourcing company.

How to Find the Best Outsourcing Company in India?

When India has so many outsourcing companies, how will you recognize which is the best outsourcing company in India?  

Finding the right partner is the key to outsourcing successfully. It further determines how fruitful the venture would be.

There are a few simple questions to ask to know which offshore company you have to collaborate with.

  • What kind of services do you offer?
  • What pricing engagement models do you have?
  • Do you follow quality standards?
  • Are you comfortable in signing a non-disclosure agreement?
  • How can I interview your developers?
  • What will be the team size of the development team?
  • Have you worked in the same niche before?
  • Do you offer after-service support as well?
  •  Can I have a look at your portfolio and get a few references?
  • Do you also help in setting up an offshore development center with dedicated developers? 

After you are done asking all these questions, you can ascertain to find the best IT offshore company in India.

Hire developers from a company that completely understands your business objectives and requirements and has relevant experience.

Make sure, you take time to interview and access their skills before you hire them. 

Wrapping Up

Whether you plan to cut costs, include in-trend technologies or focus on enhancing your business, outsource to India

Take the best decision to outsource to Indian companies and witness remarkable growth in business productivity.

This can further help in gaining a competitive edge over your competitors while positioning your business at the top in the industry.

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