Indian BPO industry targets $50 billion

The Indian Business Process Outsourcing industry should be booming in next four to five years, a study here has said and forecast that it would touch $50 billion by year 2012 from the current $11 billion and create over 2 million direct jobs in the nation.

The study, "Roadmap 2012 - capitalizing on the expanding BPO landscape", conducted by the National Association of Software and Service Companies (NASSCOM), the premier trade organization of Indian Information Technology industry.

The report indicates a possible target of $50 billion by year 2012 for the Indian Business Process Outsourcing industry. This would reflect a five-fold growth over the next five years and it could create up over 2 million direct jobs in India.

Since the inception Indian BPO sector has evolved tremendously, not only in its size but also in terms of maturity - service lines, service delivery capability and footprint, said National Association of Software and Service Companies president.

This $11 billion industry today employs more that 700,000 people across 25 countries and accounts for approximately 40 percent of the global BPO offshore market, thereby creating huge job opportunities and impacting the economy. The future potential is even bigger. This study not only estimates the opportunity ahead but also lays down specific agenda for all stakeholders to help achieve this.

The study outlines the need for significant collaboration between the industry, government and other stakeholders on a range of initiatives including education, infrastructure, country-competitiveness, and domestic Business Process Outsourcing.

Dixons IT Outsourcing to India with £150m deal

Dixons Group International-DSG, high street electrical retailer will import the services of Software Development and infrastructure support by IT Outsourcing process from the Indian Information Technology company HCL Technologies in a deal of £150 million. The Software Outsourcing firm, HCL will provide all the support from Noida site, which is going to link operations in the United Kingdom.

Chief Officer of the group has left the organization in previous year after the BOD pulled out of an IT Outsourcing deal with LogicaCMG due to cost concerns and complexity. It would be five year deal with HCL Software Development organization, with beginning time in month of February and system development, cover application delivery, infrastructure support & maintenance for the Dixons Group International that involved in brands such as PC World, Dixons, Currys & The Link.

The finance director of Dixons Group International-DSG, Mr. Kevin O'Byrne, told in his statement that, the co-sourcing partnership will definitely enhance the capabilities of organization, improve the agility and drive innovation by building their position in leading market for electrical retail of Europe. Yet, the group of DSG has not reviewed all the staff for transferring to HCL software Development Firm as part of their big deal.

Emanon Kennedy, the research director at analyst Ovum has also told HCL bit stiff competition from two international IT Outsourcing Companies for winning this software contract. In a briefing he said, to all the excluding doubters HCL has just whipped away the comfort blanket. This deal is proof that IT Outsourcing Indian Organizations have what it takes to beat the established international key players.

Software Outsourcing Product Development

The software outsourcing product development of India is increasing very quickly and booming very fast. Small cities such as Ahmedabad and mega cities like Delhi, Bangalore, Hyderabad, and Pune are now famous as offshore outsourcing hub in whole world. Similar way, Indian BPO market is also in the booming phase. Many more IT enabled services for outsourcing such as account and payroll outsourcing with an advanced trend, and Software Outsourcing product development is way ahead growing in our country. There are many small to medium scale companies that are doing Software Outsourcing of the product development to India.

In India only MNC were doing Software Outsourcing for the product development, so far, but now the trend is changing itself. It was not much incorrigible, now many companies in India have started doing product development with entered in the segment of software outsourcing product development. With this consideration the growth in this business would be more than hundred per cent with offshore outsourcing product development.

Product development requires some sufficient skills; every offshore organization is having not these skills for outsourcing of work. Product selling organization in USA and Europe could reduce cost of development for Software products by doing offshore outsourcing. With this scenario it is requiring to maintain people with specialized skills. If one wants to open offshore development center in India, it can’t be very useful but with partnering with Software Company in India they might get access to wider skills.

Software Outsourcing firms in India are very lucrative due to market and higher charge & billing rate as compared to offshore outsourcing services. On the other hand, they would concentrate on new ideas and marketing. While on the different section it might also costlier for finding & maintaining quality software developer and IT engineers.

The trend itself suggests that, major Indian Software Outsourcing companies were looking for big deal, but they have started to look after small and medium scale businesses deal. Currently, India is having more than 3.6 million small & medium scale organization that are increasing IT deployment for their firms. The competition with the respective business and cost make lots of pressure on these industries. Financial industry is the biggest outsourcer in the market that spends almost thousands of Crores for the Information Technology requirements. Any Offshore Outsourcing company manages their need for strategic suggestions and how to use IT for enterprise benefits.

Types Of Buyers Looking For Offshore Outsourcing Services

There are many types of buyers looking for Offshore Outsourcing services. In 21st century we heard the word: “Information Technology” many a times. The business of Offshore Software Development is matched with different nature of businesses and different nations as well. So this business exists in every country of the universe at some level. Many a countries are offering Information Technology services like U.K, U.S., Australia, China and India etc. but India and China are the hottest destinations for the business of IT Project Development. India and China believe that they are competitors of each other. But first of all, we have to understand the meaning of Offshore Outsourcing.

What is Outsourcing?

“Offshore Outsourcing is the way by which a company gives its projects to another company located offshore and can grow faster with new ideas at cheaper rates without their own set up and human resources”. There are some major reasons for the growth of the business of Offshore Software Development like: cost efficiency, marvelous quality with the least cost, and better focus on core competencies making offshore outsourcing an attractive solution to various business requirements.

Two types of businesses:

Buyers are seeking the services of Information Technology and also other development services. Usually they fall under one of the two types: Small Business and Medium to large business. Service providers have to understand the differences between the two types of businesses so as to deal with the buyers in a more effective manner.

(1) Small Business:

Anybody can start a home based business or with few employees in the company. These businesses don’t invest more money and run with limited funds. Thus they look for similar solutions. These business look for solutions such as developing a shopping cart, business related software and also a web site. Sometimes companies believe that the Information Technology services consist of new development technology involving excellent programming skills, etc. In short, they believe
that IT business requires particular skills and experience.

Some small companies can not provide full time software developers or programmers so in that case they must outsource their design and development work at low cost. Generally, in small companies there are no official agreements or contracts of the terms of the buyer’s requirement or service provider’s proposal, so the service providers have to do business based on personal relationship.

(2) Medium-to-Large Business:

Not only small companies but also big established companies are going for offshore outsourcing. Service Providers have many developers or programmers to develop their programs and projects also. These companies are recruiting skilled and experienced developers to give their clients, better services and on-time delivery. To reach the top, they are hiring a huge staff and not looking at cost investment, and providing high scale salary.

There are various standards for big companies like ISO 9001, CMM Level etc. ISO 9001 is a well-known quality standard recognized at the universal level. Ample numbers of offshore software development companies have already accepted this valuable standard and many of the new companies want to go in this way. Some of these ISO certified companies may also opt for outsourcing existing work from in-house to outside resources in order to decrease the cost and thus prefer to outsource to small companies. In these companies there are legal contracts, formal agreements and work for hire agreements.

Basically, offshore outsourcing has begun from data processing companies and now a day it’s expanding all over the world. Many software companies call centers, BPOs, KPOs are increasing day by day at a global level and thus the business of offshore software development is booming large. Thus it is a lucrative business for IT service providers as well the buyers looking for offshore outsourcing business.

Increased Custom Software Development to India and China

Increased Custom Software Development to India and China has brought the great revolution in the Information Technology Era. From the current market trend it can be realized that more and more companies are turning toward these two countries for all types of IT Outsourcing services. Both these countries have enough potential for all types of IT services. India possesses enough potential
for software services while China is more preferable for hardware services as both of them are capable of providing the lower cost and higher quality services.

The cost structure for the development work in the countries like United State, United Kingdom and Australia are very high. No doubt the quality of the work is good but the combination of good quality with lower cost in these countries is not possible. Costs in these countries are almost 4 to 5 times higher then it is in India or China. India is also developing a lot for in the Information Technology sector. Some of the cities of India such as Bangalore, Pune, Ahmedabad are now highly demanded globally also for the best quality development work. Bangalore is also a hub for most of the overseas IT companies for lower cost and best quality development work.

In the current booming trend of Information Technology, Custom Software Development to India is playing key role in maintaining the development cost lower. As mentioned earlier, India has better pool of resources to serve the global need. And this is the main reason that more and more companies are targeting India for most of their IT Outsourcing services. Aggressive and positive role and attitude of Indian Government is also playing the important role in the glorious success of India. India also has one more advantage and that is the English speaking ability. Most of the Indians are fluent at English speaking and that helps India to gain advantage over the other in the global market.

China is also equally popular for overseas IT services. But it is more famous for its hardware support to the globe. For Custom Software Development, India comes on the first place worldwide, while China wins the race for the Hardware types of IT Outsourcing. Both the countries also have lots of similarities for providing overseas services in the Information Technology Industry. Due to the heavy success of both of these countries some other nations have also started to put efforts in the field of overseas development work. Huge presence of local talent with great fluency over the English language helps India to capture the major share of the global market in the field of Information Technology.

India and China have really covered the most of the overseas market in the field of offshore IT service is concerned. No wonder if both the countries become the IT Hub globally for the Custom Software Development.

Custom Software Development considered as a successful business

In the world of Information Technology Custom Software Development is considered as a successful business. Gradually the business of Offshore Software Outsourcing is increasing as more and more countries are taking interest in overseas development. In this field many benefits are there like: higher profit margin, get a chance to work with global talent, to make better future, to get better knowledge not only of this field but also can get knowledge of different country’s culture, language etc. Now a day the whole world is becoming highly techno-savvy rapidly as the use of Information Technology is increasing. According to current scenario “Without technology World is nothing”. Custom Software Development is expanding as a successful business globally.

Best quality of Custom Software Development with lower cost

The latest news of the Information Technology industry is “Developers provide the best quality of the IT service with the least cost in Offshore Software Outsourcing Industry. Sometimes the overseas development work’s quality is going beyond the expectation of the customers, with the lower cost. And this is the main point that is attracting the attention of the companies to take the benefit of Custom Software Development at the global level. Finally, review of the comparison is that “offshore service is good, marvelous and mind blowing service of the Information Technology industry. The development cost of the onshore is very high in some of the countries therefore those country’s IT companies prefer the overseas development work to reduce the development cost. If customer’s aim is to save the money and get high quality, they have to choose the service of overseas development.

This above phase indicates that “trend of custom software development is expanding universally.” Now a day this business is becoming the main business of the software industries. Because of the lower cost services benefits, new trend of Offshore Software Outsourcing is prevailing highly in the market of Information Technology. There are lots of advantages in the business of such overseas development and due to these benefits overseas companies are attracting at the custom software development more.

The prime reason for the success of the Custom Software Development at global level is the increased demand of the best possible combination of lower development cost and best quality work. In that case Offshore Software Outsourcing is the best suitable alternative. Countries like India and China are highly demanded destinations for all the types of overseas Information Technology services. Both the countries are competitors of each other in the field of Custom Software Development. India still has better place in the market compared to China though.

Another advantage of the Offshore Software Outsourcing is to gain the access over the latest technology prevailing in the market place. It helps in maintaining the competitive edge at the global level. Global market has also become highly volatile due to the increased demand of Custom Software Development. As compared to previous scenario of overseas development, more and more companies prefer to accept Custom Software Development business operating process to overcome the cost factor.

INDIA AS A SOFTWARE OUTSOURCING DESTINATION

India as a Software Outsourcing destination has got huge growth from service perspective globally. The whole world has become the techno savvy as the use of Information Technology is taking place in every service industry. Now a day India is becoming the hottest country for management practices too along with the Offshore Software Development. India has also become the hub for the globe for all types of Information Technology services. It is also globally known that Indian IT service providers are not offering solution of cost effective service only, but they also offer value addition by better productivity and quality. Currently India is booming as the leading Software Outsourcing destination in all over the world.

Now a day Software Outsourcing has become the biggest trend in the Information Technology Industry. More and more overseas IT companies are interested in the arena of Offshore Software Development. These companies are also interested in the combination of reduced cost, better quality and faster time to the market services. Not only the cost is the main reason for the attraction of Software Outsourcing but also the methodology, ability and core competition are playing the key role.

For management practice, India is a famous place for the market of Information Technology globally. Country India also has no. of IT cities such as Bangalore, Pune, Mumbai, Ahmedabad rand many others. Lots of famous Software Companies are there like Wipro, Stayam, and IBM etc. India offer training for technical improvement, computer programming and many other IT services. Also India provides other training like business improvement, project and development skills and processes. India has lots of advantages of the IT business like excellent English speaking people, latest technology, low cost development services and many others.

Software Outsourcing Business

Software Outsourcing business is famous not only in the present but also in the past time. The meaning of Offshore Software Development was circulated by one of the famous author's book "The wealth of Nations" in the year of 1776. Indian government has started to follow the program of economic in 1990. Till 1994, all systems were controlled by the Indian government. Policy of new telecom is published in the year 1999. Looking at history of India, it is clear that India stands on success platform of the Software Outsourcing.

Looking at the success of India, western vendors prefer only India for the business of Software Outsourcing. Through the Business of Offshore Software Development, India’s revenue is increasing day by day. NASSCOM announced that India’s revenue earning is almost US$ 22 billion in the fiscal year to march 31 from overseas business in Information Technology. Experts are expecting that revenue will increase at least 20 to 25% in the recent fiscal year March 31 2007. Overall, India is hot favorite destination for Software Outsourcing.