Challenges and Opportunities in Outsourcing to India

Topics: Outsourcing, Business process outsourcing, Business process outsourcing in India Pages: 6 (1920 words) Published: December 21, 2012
Challenges and Opportunities in Outsourcing to India
Gulf has its natural resources in Crude oil and South Africa in diamonds. In a similar manner, India’s natural resource lies in skilled manpower. This is one of the reasons as to why India had become the biggest hub for outsourcing. The extensive knowledge of management, technical and other services with a large number of English-speaking population makes India one of the most favorite countries to outsource jobs to, by the companies of developed nations. The growth of software export and development of a number of Web solution companies has started displaying India’s success to the world. The biggest IT companies of the world including Microsoft, Intel and Cisco have already started working with India for a long time and look forward to further expansion. There are innumerable opportunities in this sector but success comes through a path filled with challenges. Challenges related to establishment, data security, maintenance, proper functioning and settlement of any disputes have seen a rise in the past few years. One of the challenges is the human resource issue. With the sudden growth in the BPO sector, it is becoming increasingly hard to find good and hard working employees for middle and upper level management. Also stealing of employees from other companies (poaching) has become an issue and companies are spending a lot of money and time to keep their existing team of employees intact. Also with the high cost of training involved, frequent hiring and losing of employees to other companies is not a feasible option. One of the biggest challenges that this industry is facing is the issue of rising cost and salary. Salary of employees in this sector has seen a rise of over 15 percent per annum in the last few years. This is making it more expensive for the companies to outsource jobs to India. This directly impacts the cost of providing service to the end consumers and has therefore, led to companies looking for new solutions and a cheaper solution is outsourcing to China and other Asian countries. Another really big concern for IT companies and financial sector outsourcing is data security and privacy concerns. The financial and IT industries take a lot of precautions to mitigate the risk of hackers and intruders stealing data and unauthorized personnel viewing sensitive data within corporate headquarters. But when the application is developed in other countries like India, the code is developed using interfaces in the host company’s network. The US firms, therefore have much less control over the privacy of data and is simply relying on the host company’s security protocol. Since any U.S based company is required to work under US privacy laws, which prevents sharing of any sensitive data without permission, companies are thriving to make the process more secure. Training investment is another factor that had led to a recent slowdown in outsourcing market. Due to the cultural differences between India and United States, Indian workforce needs to got through intensive training for the job. Some of these include proper interpretation of certain words, which may mean different to both parties. Voice sector including customer support and telemarketing are on a rise and therefore, accent training becomes an important part in their curriculum of training. Indian accent can sometimes be hard to understand for some American individuals and therefore getting that problem out of the way is a must. Voice training may also include understanding of common acronyms and so-called slang. American people tend to use informal way of communication, which includes shortening of words and therefore learning and being able to understand them is an important part for the voice sector jobs in India. Rise in poaching along with increasing cost of training is also an important issue of concern for companies in this sector. Infrastructure and Logistics is another issue faces companies in this...
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