| Outsourcing to India yielded the US economy close to $16.8 billion in the year ended 2002, NASSCOM study revealed. The companies in United States can save significantly by outsourcing work to India due to wide gap in the valuation of currencies of India and the United States. As the infrastructure costs are very high in US, it becomes quite reasonable to outsource work to India. The manufacturing overhead cost in the US is very high so it becomes profitable to outsource work to India. Not only that, outsourcing to India eliminates expenses related to employee, overtime, hiring, and layoff. Outsourcing to India also eliminates expenses related to training of new employees as well as expenses pertaining to further training of old employees. Most importantly, corporate giants in the US, Europe, and Japan prefers India for cost effective software solutions. Outsourcing business to India can save the US companies as much as 70% of the cost. Outsourcing also reduces employee benefit costs. Outsourcing of work to India frees the companies in US and Europe from the burden of trade unions and medical expenses spent on employees etc. It is interesting to know that the average monthly salary in India is $400-700 compared to $2700-2800 in the US. In a call center operation, manpower typically accounts for 55 to 60 percent of the total cost. In India, the manpower cost is approximately one-tenth of what it is overseas. The advent of outsourcing has not only given cost advantage to he US companies but it has also given better quality of work. This is because the people who are doing this work in India are often more qualified than the people in the parent locations. A survey which was conducted by NASSCOM indicates that India based ITES-BPO center in banking and financial service sector, performs better than a UK or US based facility on important factors, for example the number of correct transaction/total number of transaction, total satisfaction factor, number of transactions per hour and the average speed of answers. The Indian outsourcing companies provide high quality work; meet international standards and are complying with the ISO & SEI-CMM standards. The NASSCOM survey reveals that 50 percent of Indian companies have implemented varied levels of ISO. Three out of every four SEI-CMM 5 companies in the world are located in India. Thus Indian outsourcing industry promises quality as it has the potential to furnish these services perfectly. |
