India has always been a hot topic for discussion. Whether it is population, religion, diversified culture & festivals, or outsourcing IT services like software development. Being the land of opportunities, India has always got attention from entrepreneurs around the globe.
Even the top tech giants like Microsoft, Google, Ford Motor Company (FMC), CISCO, and American Express (AMEX), outsource IT services to India. And the reason is quite simple, India has the required resources to fulfill the growing demands of the software industry.
Providing cost-effective yet quality services, India has now become a support system for most of the software companies in the western world. As a result, India dominated the global outsourcing market in 2018 with a 67% share.
Indian IT industry is valued at more than $150-billion, having a growth rate of 10-15% per year. That’s massive!
The number itself is enough to understand why most companies outsource in India. But after 2018, the country experienced a major boom in the IT sector, leading to unprecedented growth, and making it the number one choice to hire developers for software operations.
Let’s understand why!
What Do Experts Say About India’s IT Outsourcing Growth?
- 1 What Do Experts Say About India’s IT Outsourcing Growth?
- 1.1 Why Companies find it Beneficial to Outsource in India?
- 1.1.1 1. Talent Acquisition and Vast Pool of Professionals
- 1.1.2 2. Outsourcing in India is Budget-Friendly
- 1.1.3 3. Reliability and High-Quality Standards
- 1.1.4 4. Communication is the Key
- 1.1.5 5. Utilization of Time-Zone Difference
- 1.1.6 6. Support from Indian Government
- 1.1.7 What Else?
- 1.2 Top 3 Challenges of Outsourcing to India
- 1.3 Top Market Trends in IT Outsourcing
- 1.4 Conclusion
Head of research at the NASSCOM (National Association of Software and Services Companies), Achyuta Ghosh said: “India is a unique example of the ‘big getting bigger’ in an extremely competitive landscape. Its IT-BPM exports have doubled in the last six years, driven by increasing focus of the industry in new drivers such as digital technologies, growth of an innovative start-up ecosystem, and adoption of multiple business models such as partnerships, collaboration, local presence and mergers, and acquisitions.”
According to him, the IT exports are expected to exceed $330 billion by 2019-20. He says “India is a global digital hub offering a plethora of opportunities and services.
There is a special focus on the latest technologies like Big Data, the Internet of Things (IoT), Cloud, Social Media, and Mobility. In addition, solutions being developed emphasize more on the design, creativity, agility, and customer experience”.
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Why Companies find it Beneficial to Outsource in India?
A brilliant state of the art technologies combined with rich talent and impressive economic growth makes India one of the best IT outsourcing hubs.
The country not only accommodates skillful developers for hire, but also is very driven by great & creative designers, software testing teams, support and maintenance professionals, and a lot of additional administrative support.
Let’s take a look at some of the top benefits of IT Outsourcing to India:
1. Talent Acquisition and Vast Pool of Professionals
Being the world’s second highly populated country, India has a huge pool of young and technically sound trained professionals.
India has got one of the largest talent pools in the world. Becoming a web or mobile app developer is one of the most lucrative career options in the young minds of India.
According to C SharpCorner, by 2023 India will become the largest hub of software developers in the world. Most of these developers are well equipped with the required KSAs and can help you achieve your business objectives.
In fact, in the next couple of decades, India will add approximately 110 million resources to its workforce.
The abundance and easy availability of dedicated offshore developers makes India tick faster and better when it comes to offering a large and intricate solution in time.
Besides, it helps various countries to provide solutions in a range of value brackets which preferably suit their business needs. Moreover, virtual teams have a high potential to adopt new technologies and maturely grasp them to create better solutions.
They work on the latest technologies and advanced solutions which are otherwise challenging to apply. India leads the wagon of outsourcing as it practices technologies and stays up to date with the latest trends.
2. Outsourcing in India is Budget-Friendly
The cost is the most decisive factor and perhaps the most enticing reason why other countries prefer outsourcing in India. The development cost in India is 30-35% lower as compared to the US and Europe.
The average hourly salary of developers in India ranges from $20 – $40/hour. It is significantly lower in comparison to the salary of developers in western countries ($100 – $150/hour).
Most of the offshore development centers in India offer their clients per hour or fixed monthly prices so that they can choose as per their convenience. By hiring Indian software developers, 65% of operational expenses can be saved, thereby increasing the company’s profit.
Do you think that’s vague? No worries, we will provide you an opportunity to see this difference yourself. Just use our outsourcing ROI calculator & evaluate the difference between the average expense of insourcing vs outsourcing.
Have you seen yourself, how much you can save annually by outsourcing IT services? Well, that’s just one benefit of outsourcing. By working on an optimized approach and cost-effective models, India helps you gain an edge over the competitors.
3. Reliability and High-Quality Standards
Companies that provide outsourcing services in India provide high-quality work, meeting all the international standards.
According to NASSCOM:
- The IT-BPO industry in India has managed to aggregate the revenue of $154 billion in the year 2017.
- Over the upcoming five years, 40% of India’s workforce is expected to amplify their skills to meet the advanced requirements.
The Indian outsourcing companies follow the best international standard practices, that includes:
- The Capability Maturing Model (CMM), that can access the capability of an organization’s processes to implement a project.
- The International Standard Organization (ISO 9000) that assures quality in design, development, production, and installation.
- Total Quality Management (TQM)
- Six Sigma Quality certification
- Customer Operations Performance Center (COPC) that guarantees to deliver quality software within the deadline.
Over 75% of the world’s CMM Level 5 certified companies are in India. In fact, the highest number of ISO-9000 certified software companies are in India.
In short, the above standards & certification ensures that Indian software companies promise quality, having the potential to furnish various services perfectly.
4. Communication is the Key
All in all, communication is the root of the beginning, maintaining and growing a positive relationship with the firm. Also, good communication guarantees expected results and resolved issues.
According to a survey, approximately 350 million people speak English in India. And India is the second-largest English speaking country in the world after the US.
According to a report by BBC, “India now claims to be the world’s second-largest English-speaking country. The most reliable estimate is around 10% of its population or 125 million people, second only to the US and expected to quadruple in the next decade.”
That’s why communication is no barrier, and your journey for outsourcing in India will be comfortable. India prides its reliable communication which facilitates good band connectivity with the rest of the world, and for this reason, there are no connection hurdles.
5. Utilization of Time-Zone Difference
Additionally, outsourcing in India gives you an option to quickly time-to-market due to the advantages gained by time zone differences.
The 12-hour time difference between India and the USA provides companies with numerous opportunities for work to be completed earlier than expected, leading to greater efficiency, increased productivity, and more time to focus on other crucial tasks.
The time zone difference makes India a great option for clients who wish to outsource various service-related options, such as 24X7 Customer Support and Helpdesk services, and software development services.
6. Support from Indian Government
The IT industry is one of the largest sectors of the Indian economy. Like mentioned earlier, the IT sector provides employment to the majority of the young workforce in India.
For this purpose, the Indian government has made the policies friendly. Moreover, the formalities and tax laws will not bother you much.
From GDP growth, taxation, power, telecom, industrial parks, and special zones have been helpful in improving infrastructure as well as communications systems.
Software outsourcing in India is a globally proven model because numerous companies have successfully delivered great results. In this fast track world, Indian offshore development centers have managed to comply with the demanding situations and manage tasks effectively.
Email, chat support, and audio-video conferencing made it possible to collaborate in an effective manner. Moreover, focusing on the client’s business, the professionals monitor the digital presence offering support as per convenience.
Some of the biggest companies that have dedicated offshore development centers in India.
Top 3 Challenges of Outsourcing to India
1. Finding the Right Outsourcing Partner
Though it is the least area of concern while outsourcing to India. As mentioned earlier, most of the service providers in India follow quality standards. So, you will find the right outsourcing partner easily.
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However, you should not consider it lightly. Because not associating with a reliable outsourcing partner can ruin everything.
To avoid this challenge, create a list of top 5 software development companies and conduct thorough research on their market reputation. Don’t just rely on the project references but also get insight into their work approach, methodologies, and implementation process.
It would be great if you could visit them personally before signing the contract. This way you can analyze some of the key factors, like infrastructure, facilities, and meet your offshore team in person. It will help you build a strong relationship with your offshore team and make your outsourcing journey successful.
2. Understanding the Scope of Work
One of the biggest reasons behind the failure of outsourcing projects is a lack of project understanding or effective collaboration. In most cases, this happens due to the lack of defining the project scope in terms of documentation or changing the scope every week or twice.
To avoid such issues, you should be first clear about your vision for this project. The next step is to document your idea, outline your requirements in terms of skill set and expectations from the offshore staff. Also, in some cases, you may need to engage your in-house developers initially for a few days to transfer knowledge.
Undoubtedly, Indian software developers are hardworking and can deliver quality results, if you can guide them & provide clarity on the project or specific tasks.
3. Time-Zone Difference
Most entrepreneurs consider it as the biggest challenge while outsourcing to India. With more than 9 hours of the time difference between the USA and India, it’s difficult to overlap hours and communicate.
It is certainly difficult but not impossible. To mitigate this challenge, Indian outsourcing companies work in specific work hours that allow their team to overlap 2-3 hours of time with their US client, providing enough time to communicate and discuss project progress.
Clearly, these are just challenges and can be taken care of by associating with the right technology partner. But there is one issue that may change everything about outsourcing IT to India, and that is the rising cost of Indian developers.
Getting worried? Well, don’t. There is no way to stop the spread of rumors from competing countries. But in reality, the rising cost of outsourcing IT to India should not be a big concern and the reason is quite simple.
The cost of Indian developers is significantly lower than the US, Canadian, and Australian developers. And based on the reports, the current hourly rates of developers are between $30 – $40/hr, which is affordable for most companies around the globe.
Top Market Trends in IT Outsourcing
1. Cloud Services
Cloud services are trying to shift businesses to the cloud. Gartner has surveyed that cloud is going to have an impact of $1Trillion on cloud services by 2020.
Cloud services have been in increased demand because of the need to store huge data with reduced costs. Outsourcing companies will have the option to provide cloud services to easily dedicate their business to the cloud.
Soon automation will be responsible for streamlining the daily monotonous tasks. A GSA report showed that 83% of survey respondents believe that Robotic Process Automation will be one of the most important technologies of the decade, while 80% believe the same for Artificial Intelligence.
3. Progressive Web Apps
Web-based apps will be cherished and introduced by businesses from industries like banking, healthcare, and e-commerce. These apps deliver reliable performance that users have come to expect from any installed experience.
Related Post – Progressive Web Apps (The Key to Boost your Business Online)
4. Smart Software
The need and demand for connected devices have been increased and users want more of these kinds in making their life easy. The investment in smart software has increased and in some years trillions of dollars will be spent on it.
Different industry domains are now making use of IoT apps to automate their processes and in the coming years, its numbers will rise drastically.
Over the years, top Indian outsourcing companies have adapted to internal and external capabilities to offer best-in-class services. Also, the world is gradually realizing the fact that outsourcing to India over other countries is the best decision. In terms of capital, timezone, deliverables, skills, communication, technology, and the growing country that it is.
Another fact about outsourcing is that setting an offshore development center becomes very sorted when you have clarity regarding your project goals and dispositions. So, you can choose the best outsourcing company based on your requirements, cost, quality, time, and policies.
Did you Know?
Recently, Google has announced to embark its ‘Research & Development Centre’ in India. Hence, this move reflects the confidence of the tech-giant in Indian developers.
Moreover, innumerable multi-billion dollar companies are outsourcing in India; namely Cisco, Oracle, Hewlett Packard (HP), and the list is long.
Words for the Wise
Hire a team of dedicated offshore developers and not freelancers.
No matter what is the size, scope, and requirements of your project, hire an offshore development team that will deliver the end-product before time. This is important for your business to choose a dedicated offshore development center because of the reliability and scalability that an ODC offers.
Still Confused about Outsourcing in India?
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