PRODIGOUS GROWTH IN OUTSOURCING.

Outsourcing is the where India has plunged and propelled itself into the global arena. India has copious and proficient English speaking manpower only second to the US in terms of English speaking pool and the fact that 50 percent of Indian companies have put in place diverse levels of ISO (The International Organization for Standardization) which has created sets of quality standards such as ISO 9001:2000,ISO 9001: 2001.In a world where IT has become the spine of businesses worldwide, 'outsourcing' is the process by which a company dispenses part of its work to another company, making it accountable for the implementation and design of the business process under strict advice regarding requirements and specifications from the outsourcing company. This process is beneficial to both the outsourcing company and the service provider, as the outsourcer is able to reduce costs and bring about upsurge in quality in non core areas of business and utilize his expertise and abilities to the maximum.
And this is where Indian companies fit in best and has resulted in a $17.2 billion Indian outsourcing industry. According to Gartner, a market research firm, the magnitude of the global BPO market by 2007 would be $173bn, of which $24.23bn would be outsourced to offshore contractors. Out of this, India has the capability to make $13.8bn in revenue. That’s an amazing amount of moolah raked in by India.
India is even now the No. 1 destination for that work for a rising number of American companies. India's rock-bottom wages just and an amazing pool of talented manpower that speaks English are some of the reasons that attract US companies to outsource their businesses in India. The average annual income in the US is $42,027 versus a paltry average annual income of $737 for India. An American college student earns five times more than his Indian equivalent. And the Indian student is willing to put in 12-hour per day, six days a week. The end result being that U.S companies is supposed to employ more than 15 lakh service workers in India by 2008, a threefold increase from present day scenario.
India's outsourcing income rose 32 percent to reach US$6.6 billion in the second quarter of 2006. India thus continues to remain the most attractive terminus for Western companies to transfer their back-office work. Such is the prodigious growth of Indian BPO companies that India’s numero uno third party BPO WNS raised $89.5 million from its IPO and its share price jumped 7% on the initial day itself. This is ample testimony to the fact that US investors have huge faith in the BPO firm WNS and the Indian BPO scenario.
While it might be despair for the UK workers, ringing cash for Indians. Orange is closing a call centre in Peterlee, Durham. The company had originally proclaimed plans to cut 100 jobs in Solihull, West Midlands while generating 300 new jobs in India, where it has a 1,000 people are already employed.
Outsourcing of business processes like billing and customer support started towards the end of the 1990s when MNCs established wholly owned subsidiaries. Some of the earliest players in the Indian market were GE Capital and British Airways. The ITES or BPO industry is a budding and juvenile sector in India. Although the arrival was late, the industry has grown astoundingly and has now become an integral part of the export-oriented IT software and services environment. MNCs formed the lion’s share of the ITES\BPO sector but it gradually gave way to leading it software organizations and third party service providers. Today, Indian companies are offering an array of outsourced services ranging from transcription, to Web sales, marketing, billing services and database marketing, tax processing, transaction document management, accounting, HR hiring, biotech research and customer care.
The central government realizing the potential of the ITES\BPO sector established ‘Export Enterprise Zones’. The central government is providing support to combat various problems (chief being attrition problems). Tax holidays are now being provided to ITES\BPO sector. Everything seems to be in the right direction for the Indian ITES\BPO sector.
NASSCOM (The National Association of Software and Services Companies) acts as a consultant for the ITES/BPO sector and conducts various research activities, which has resulted in regular inflow of moolah by foreign companies. During 2003-2004.the ITES\BPO sector realized a 54 percent growth in revenues. India's portion of the global offshore outsourcing market for software and back-office services is 44%. According to the National Association of Software Companies (Nasscom), India’s premier trade body of the IT software and services industry, technology and IT services exports in India were worth $17.2bn (£9.5bn) in the year ended March 2005, a rise of 34.5% over the previous year. A further increase of 30% in exports is predicted in the next twelve months, to reach $22.5bn. The US accounts for 68% of Indian exports.
The Indian ITES\BPO segment continued to rally by raking in strong year on year growth of 37% for the financial year 2005-2006.The growth is being driven by a steady increase of offerings that is beyond their existing service lines. The Indian IT/BPO segment is expected to employ over 1.1 million Indians by the year 2008. In terms of job creation, the ITES-BPO industry is expanding at over 50 percent. In 2003-2004 close to 70,000 jobs were added in the ITES/BPO sector. The growth story of the ITES\BPO sector is complementing employment numbers as well. The figures below by NASSCOM show the upturn in employment figures with each passing financial year.

EMPLOYMENT FIGURES IN THE ITES\BPO SECTOR.CHART NO 1 GIVEN IN PRINTOUT.

EXPORTS (ITES\BPO) IN USD BILLION.CHART NO.2 GIVEN IN PRINTOUT.



After BPO, India is turning into a global hub for KPO (Knowledge Process Outsourcing). KPO would grow at 46 percent to become a 17$ billion sector by 2010 out of which 70% that is about $12 billion will be outsourced to India.KPO entails high-end processes like patents, investment research, property rights, valuation researches. Companies are shifting towards providing high-end services, which includes R&D (research and development) and even providing legal support.
Global companies that have invested in research and development in India include General motors; Motorola as well as pharmaceutical majors like Pfizer and GlaxoSmithKline.Many Indian pharmaceutical companies have tied up with foreign companies in co-developing drugs through clinical trials and research.
India’s large pool of lawyers who have knowledge about the British legal system offer legal services are cornering a miniscule share in the foreign market by doing legal research at good rates thus opening up a whole new segment of legal outsourcing.
The service provided by many Indian companies is of good quality and provided at a reasonable cost. Foreign companies are attracted towards outsourcing their business in India because of low rates but stay in India for their quality services and the future of outsourcing is upbeat for India