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Indian outsourcing history

2019-05-17 Business No comment

India's outsourcing history is one of the history of achieving significant growth in a short period of time. The idea of ​​outsourcing stems from the competitive advantage ' Adam Smith's theory of communication in his book The Wealth of Nations. The book was published in 1776. Over the years, the term “outsourcing” has meant a major change. The initial manufacturing transformation into a country that provided cheap labor during the Industrial Revolution presented new connotations in today's scenario. In a world where IT has become a pillar of global business, Outsourcing is the process by which a company transfers part of its work to another company, designing and implementing business processes based on the strict guidelines of the outsourcing company's requirements and specifications. This process benefits both outsourcing companies and service providers because outsourcers can reduce costs, improve the quality of non-core business areas, and maximize their expertise and capabilities. Now, we can see the success, prosperity and core capabilities of Indian service companies that go beyond the benefits that outsourcing companies can usually bring.

Since the globalization of India in the early 1990s, the successful Indian government has been pursuing economic reforms aimed at liberalization and privatization. Until 1994, the Indian telecommunications sector was directly controlled by the government, and state-owned units enjoyed a monopoly in the market. In 1994, the government announced a policy under which the department liberalized and encouraged private participation. With the introduction of IP telephony, the new telecommunications policy of 1999 brought about further changes and terminated the country's monopoly on international telephony facilities. This idea has been drastically reduced, which heralds the golden age of the ITES/BPO industry and welcomes a large number of inbound/outbound call centers and data processing centers. Although India's IT industry existed since the early 1980s, outsourcing occurred in the mid and mid-1990s. One of the earliest outsourcing services was medical transcription, but the outsourcing of business processes such as data processing, billing and customer support began in the late 1990s, when multinational companies established wholly-owned subsidiaries to meet the parent company's outsourcing needs. . Some of the earliest participants in the Indian market were American Express, General Electric Capital and British Airways.

The ITES or BPO industry is a young and new industry in India that has existed for more than five years. Since the recent entry into the Indian market, the industry has grown rapidly and is now a very important part of an export-oriented IT software and services environment. It started as a multinational company-related event, but today it has evolved into a broad-based business platform supported by leading Indian IT software and services organizations and other third-party service providers. The ITES / BPO market expands its base with the entry of Indian IT companies. Today's ITES market is characterized by the presence of these IT giants to leverage its broad range of skills and a wide range of services to customers worldwide. The range of services offered by Indian companies has changed substantially from their inconspicuous beginnings. Today, Indian companies offer a variety of outsourcing services including customer service, transcription, billing services and database marketing, online sales/marketing, accounting, tax processing, transaction document management, telemarketing/telephony marketing, HR recruitment and biotechnology research. .

Looking at the success of the IT/software industry in India, the central government believes that ITES/BPO is a key factor in economic growth, and it is a priority to attract FDI in this area by establishing a software technology park. And the Export Enterprise Zone ' ITES / BPO department also provides benefits such as tax holidays that are generally enjoyed by the software industry. The National Telecommunications Policy [NTP] was launched in 1999, and the deregulation of the telecommunications industry opened up the link between the country, long-distance and international competition. State governments also provide assistance to companies to increase recruitment, retention and training challenges to attract investment in the region. The National Association of Software and Service Companies [NASSCOM] has created a platform for disseminating industry knowledge and research through its surveys and conferences. NASSCOM serves as a consultant, consultant and coordinator. Liaison between the ITES / BPO industry and the central and state government committees and industry. The passionate advocacy of the ITES / BPO industry has led to the call center joining the "business support services" industry. The service tax is exempted under the 2003 Fiscal Act.

These measures have led to steady investment by large foreign companies such as Reuters to build large ITS / BPO facilities in India. In addition, the existing multi-ethnic existing ITES / BPO business is also increasing to meet the growing demand for better and faster service. Almost all of India's top IITE / BPO veterans have announced some form of expansion and are hiring manpower to fill additional seats. India's competitive advantage lies in its ability to save significant costs by increasing productivity, which gives India an edge in the global ITES / BPO market. The NASSCOM study pointed out that the following factors are the main reason for India's success in the industry [source: http://www.nasscom.org]:

o Rich, skilled, English-speaking people, even hated by ITES centers such as Singapore and Ireland.

o Improve telecommunications and other infrastructure that rivals global standards.

o High quality positioning between players and their focus on measuring and monitoring quality objectives.

o Fast turnaround times and the ability to provide round-the-clock service based on a country's unique geographic location, taking advantage of time zone differences.

o A proactive policy environment that encourages ITES / BPO investments and simplifies rules and procedures.

o A friendly tax structure that keeps the ITES / BPO industry at the same level as IT services companies.

Outsourcing to India provides significant quality and productivity improvements for key parameters of overseas companies, such as the number of correct transactions/total transactions; total satisfaction; number of transactions/hours and average response speed. The NASSCOM survey also revealed that Indian companies are more focused on maintaining quality and performance standards. In terms of quality standards, India's ITES / BPO companies are on an upward trend. Organizations that have achieved ISO 9000 certification are moving to the ISO 9000:2000 standard, and companies on the CMM framework are realigning the CMMI model. In addition to investing in upgrading their CRM and ERP programs, many Indian ITES companies have begun to recognize COPC quality certificates and are working hard to implement COC licenses.

After the global ITES / BPO industry began to grow, the Indian ITES industry grew by more than 50% in 2002-03. Industry experts believe this is a positive sign for future time, and look at rankings, revenue and demographics to show the potential of the industry. The value of the global ITES/BPO industry in 2002 was approximately $737 billion. According to International Data Corporation estimates, its CAGR will reach 9% during the period 2002-2006. NASSCOM lists the main indicators of the high growth potential of the ITES/BPO industry in India as follows [source http://www.nasscom.org]

o During the 2003-04 period, the revenue of the ITES-BPO division was estimated to have increased by 54% compared to last year.

o ITES export revenues were $3.6 billion, up from $2.5 billion in 2002-03.

o The ITES-BPO department also provided an important opportunity for job seekers to create employment opportunities for approximately 74,400 employees in India during 2003-04.

o As of March 2004, the number of Indians working for the sector jumped to 245,500.

o According to NASSCOM and leading business intelligence company McKinsey & Co. Research conducted, by 2008, the department is expected to employ more than 1.1 million Indians. Market research shows that the ITES-BPO industry is growing by more than 50% in terms of job creation.
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  The 2004 survey of the ITES/BPO industry in India is expected to follow the following trends:

Customer Care: Customer Care and Support Services will continue to lead the way in revenue generation with a turnover of approximately $1.2 billion in 2003-04 and a turnover of $810 million last year.

Finance: As the financial services sector enters value-added areas such as insurance claims processing, financial management services and equity research, the sector is expected to achieve the highest growth, with an estimated revenue of $820 million in 2003-04, up from 510 million in 2002-03. Dollar.

Human Resources Services: Human resources services are also expected to grow, with revenues expected to reach $70 million for the 2003-04 period, providing potential opportunities for key players in the industry.

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