Is Indian Offshoring Advantage For Ethernity (for The Motion) (nep 2008 Batch)

Is Indian Offshoring an advantage for Eternity- For the Motion

An NEP Presentation by ILLUMINATI- FG2 Fall Winter 2008 Batch

“

We will create a system of education that will not change their colors, but will make them white in their thinking”

-Lord McCauley (19TH century)

Seed to Tree

Birth of Offshoring  Entered the language in 1980s.  

Introduced by information system trade press. Outsourcing  Coined to describe growing trend of transferring information system out of house to 3rd party company.

Source: Indian offshore Advantage by Ian Hunter



Offshoring is an extension of outsourcing where relocation of work moves across geographical organizational boundaries.



Offshore processes can be handed off to thirdparty vendors or remain in-house.



Advantage of lower-cost labor in another country.

Outsourcing Outsourced off shoring

In-house off shoring

Idea behind Offshoring 

So that companies can focus on their core activities and maintain control over their strategic elements.



To increase profit margins.



To seek advantage by offshoring work to countries which are cost effective.

Idea meets Advantage India

India Rising 

Second headquarters of major companies like GE, British airways etc..



Boeing 787 handed over cockpit maintenance work to HCL Technologies.



Morgan Stanley  hired Indians to perform analysis of stocks.

Source: Boeing.co.in , Businessweek.com

Indian Offshoring Advantages Under 3 Main Heads  Availability

of large talent pool

 Low

cost

 Fast

turnaround time

Emerging Competition

India Philippines

India’s edge over Philippines 

India leads Offshoring with 35% market share as compared to 15% that of Philippines in 2008.



In terms of graduates at 480, 000, Philippines lags behind India’s 30, 00, 000.

India’s edge over Philippines 

Challenges faced by Philippines a. Specialized skills, b. Access to quality management talent, and c. Talent migration

India’s edge over Philippines 

Philippines lags behind India when choosing an Offshoring location, such as: a. Risk b. Infrastructure, c. The availability of vendors, and d. A paucity of skilled middle managers.

India China

Points of difference  Human

Resource and Knowledge

Management

Points of difference 

Perception is Reality



China may fall victim to its own success



Cross Country Constraints



Industry



Growth Investment



ITES – Information Technology Enabled Services.



BPO – Business Process Outsourcing.



KPO – Knowledge Process Outsourcing.



RPO – Research(Recruitment) Process Outsourcing.



HRO – Human Research Outsourcing, etc.

ITES - outsourcing of processes that can be enabled with information technology and covers areas like finance, HR, administration,

healthcare,

telecommunication, manufacturing etc.

BPO-The contracting of the operations and to a responsibilities of a specific business function third-party service provider.

KPO- knowledge and information related work is carried out in a different company or by a subsidiary of the same organization.

RPO -Is a form of outsourcing where an employer outsources transfers all or part of its recruitment activities to an external service provider. HRO - Offer an array of Human Resource Management solutions designed to reduce the costs of traditional human Resource models.



Medical transcription



Customer support services



Technical support service



Exam result evaluation



Insurance processing



New Business/ Promotion



Policy Maintenance/ management, etc.

 Direct

employment to 1.5 million

professionals  There

is a positive relation between

high skilled services and GDP.  It

has led to the enormous

infrastructure improvements.  It

has led to the development of SEZ.

Occupation Structure

Exports Others

Petroleum products

Economic survey 2007-08



Offshoring is profitable for Indian ITES in the case of rupee depreciation.



Engineering goods and IT services contributes 30% to Foreign Inflows in 200708.



The competition for talent is heating up.



Harmonic political relations with other

RECESSION IN USA AND OFFSHORING WHAT IS THE CONNECTION ?

Will India sneeze when US catches a cold ? 

Thanks to Offshoring



Offshoring is an integral part of the rising tide in globalization



Its reputation for low-cost but high quality work



Vast and growing IT labor pool being trained to support global client base

Offshoring to India – a propellant on the US economy 

It is the business of America to design and innovate



Jobs off shored create jobs within the country



US exports will be billions of dollars higher in the long run



International relationships could influence

The Next Big Thing in Offshoring 

Engineering design Offshoring



Increasing trend of us based newspapers publishers Offshoring to India



The delivery models are well established



India is well positioned to become a back office for America



Indian firms are generating thousands of new technology jobs

Will it last till Eternity ?  The

reported death of Indian offshoring is

greatly exaggerated.  Productivity  Salary

and scale.

increases with Productivity

improvements  Multiyear  Vastly

experience advantage.

improved its IT infrastructure.

Will it all last till Eternity ?  Leverage  Moving

in India's university system.

to tier-II and tier-III cities.



Education on a rise in India.

•

-560 universities and 13,200 higher education institutions produce an estimated 14 million employable workforce—the largest of all 28 countries MGI has studied.



The private spending on education -expected to increase 13% to 15%

•

It is estimated that by 2011-12, it will surpass Rs. 100,000 Crore from just Rs. 26,883 Crore in 2000-01. (Source: Ministry of HRD, Government of India, 2006-2007).



Although China has increased expenditure on education, it only accounts for 3.01 percent of the GDP in 2006 (Source: Article in Beijing News.)

• • • • • • • • •

Pune Chandigarh Ahemedabad Jaipur Rajkot Kochi Goa Bhubaneshwar Vishakapatnam

• • • •

Patna Baroda Varanasi Nagpur

Most of the operation in 3rd tier cities would be that of sub-contracting

Younger Population.

Will it all last till Eternity ? 

2/3rd CMM Level 5 organizations are based in India.

 Government  Time

Initiates.

Zone Difference.

 NASSCOM

Initiatives.



When you offshore to India, you offshore to world-class systems and quality.



Indian offshoring industry is at a growth stage and the trend is expected to continue.



India’s unique set of attributes translate to a sustainable position as an offshoring destination which will last till ETERNITY.

 Gaurav  Jugal

Kumar

Desai

 Kshitij

Arora

 Niharika  Rahul  Rosy

Goel

Mahajan

Walia

 Sukhneet

Wadhwa

Thank You We are now open to queries