Business Process Outsourcing to India, Its Cost,Benefits and Risks

Business Process Outsourcing to India

Its Cost , Benefits and Risks

Business Process Outsourcing to India : Its Cost , Benefits and Risks

Introduction

In the face of mediocre economic prospects resulting from one of the largest economic downturns since the Great Depression , companies are striving to streamline and become profitable . In addition , scandal has befallen numerous US corporations , the indiscretions flowing from the upper echelon of corporate executives , CFOs CEOs and COOs . As a result of public scrutiny of corporate "waste " and demand by shareholders for continually increasing shareholder value , managers are

seeking outsourcing and offshoring as creative means to reduce cost in the areas of production and operations . Yet outsourcing and moving operations offshore are neither new nor creative solutions . However the trend is occurring in the industries "whose tech bubble burst " in the late 90 's - the IT industry . What is more creative is the destination of the outsourced work , India

More American firms are looking at India to outsource software services business processes and manufacturing . Firms are attracted by the prospects of high quality work at low cost , crucial in times of a downturn . Analysts at technology research firm Gartner Inc said "Companies are interested in going offshore , and generally speaking most of the time that means going to India " Rita Terdiman , Gartner Inc 's U .S .-based research director . National Association of Software and Service Companies (NASSCOM ) has projected that R and D outsourcing to India will grow to 11 billion by 2008 (C Pettey , 2001

India is observing a change , a change which is introducing a new wave and a new model of economy in India . This is reflected in Bill Gates comments "Three years ago , during my visit to India , the country was emerging as an IT superpower . Today , the country is handling the most sophisticated projects in the world .I am impressed with the talent we have in our India Development Center and the quality of software being developed (offshoreitoutsourcing .com , 2004 ) This gives an indication about a revolution observed in economy of India , which is highlights in form of rapid growth in e-commerce and IT related business processes One of such major buzz words is BPO which is Business Processes Outsourcing

Definition , Concepts and Process

The definition of outsourcing given by Webster 's Universal Dictionary is "A company or person that provides information to find a supplier or service , to identify a source . And according to definition given by Australian Computer Society about Outsourcing (T . Worthington , stated that in business scenario outsourcing means is a pure contracting transaction whereby one company purchases services from another while retaining ownership and responsibility for the underlying processes the clients tells the provider what they want and how they want the work performed . Here the client authorizes the provider not only to own and operate , but also redesign underlying processes , to reap even greater cost and efficiency benefits

But what is that which makes India , a preferred destination for Business Process Outsourcing , a phenomenon boom in Indian economy...