Category: Strategy

In the last few years, we have seen cloud computing invading offices, homes and corporations. It is becoming increasingly important to pay attention to how quickly cloud will take over in-house infrastructure. The possibility of cloud based IT outsourcing taking over in-house IT infrastructure might happen as soon as 2015 according to a research study. Cloud is only going to get bigger More than 35% of IT outsourcing is now over the cloud and it is expected to cross 50% by 2015 according to SAVVIS, a CenturyLink company. By 2018, the report estimates that cloud will take over more than 70% of IT infrastructures and resources. There are several reasons for this trend. First of all, cloud reduces costs and then it improves quality, helps people to be flexible, gives access to improved technology and also reduces administrative time. With all these benefits in place, we see no reason why people must not begin to adopt cloud computing as soon as possible. Corporate companies were hesitant to adopt cloud technology initially but that situation has reversed. In fact, cloud computing has grown so aggressively that most outsourcing companies exist today because of clued computing. Here are 5 ways in which cloud based IT outsourcing is superior to in-house IT infrastructures. Cloud reduces costs It is no secret that cloud computing is all about money. It helps companies to reduce costs and ensure that a lot of that money is spent on something more useful. This alone is enough for us to recommend cloud computing. Cost reduction is hugely important today as companies simply do not have the money to invest in legacy systems and to engage in IT development themselves. Using cloud based IT outsourcing helps such companies to reduce costs. Improves quality of work As cloud reduces cost, it indirectly increases the quality of work that is finished. The outsourcing agencies have much money to gain from increased workflow and the client companies have an added advantage of getting rid of IT development tasks that proved too difficult to manage. At the end of the day, it is a win-win situation that helps people to save time, money and engage in work. Increases flexibility As cloud computing is carried in the cloud, it greatly increases flexibility. Employees will no longer need to visit offices everyday and login to legacy systems. They can work from anywhere that has a connection to the Internet. This is one of the reasons why outsourcing has been growing by leaps and bounds. Increased flexibility also means companies have more freedom to engage in activities that they previously couldn’t. Access to good technology More and more companies are beginning to enjoy the luxury of using cutting-edge technologies, thanks to cloud computing. It is impossible to gain access to cutting-edge technologies unless they are available over the cloud. It reduces costs and is a more democratic way of working with technology. Even smaller companies that cannot gain access to expensive software programs can use cloud based software programs. Reduction of administrative time Cloud computing automates a lot of things and reduces the need to administrate IT activities. It helps companies to ensure that they do not need to be always monitoring IT activities. Cloud computing takes care of IT activities that previously needed to be taken care of by in-house IT professionals. It has led to a situation where companies are now more willing to send work to people elsewhere in the cloud rather than taking up all the IT related work themselves in in-house infrastructure. Storage, hosting and everything else that previously needed to be housed at a location can now be hired on the cloud. One of the main reasons why cloud computing is becoming increasingly accepted is because high speed internet connections are making in-roads even in poorer countries. India now boasts of very high speed connections and this helps outsourcing companies to provide cloud solutions with ease; something that they previously were not able to do. Changing times and changing technology has helped companies in countries like India to offer cheaper services in the cloud. Companies in the U.S. or in the U.K. will no longer need to house their IT infrastructure within their own offices. Almost everything can be outsourced over the cloud.

India is burgeoning economy that has only grown to become ever more important domestically and internationally. The country might have its economic woes but the fact that large number of people now fall into the middle income group is proof enough for the hypothesis that Indians have a larger buying capacity today than yesterday. The outsourcing story as it happened in India Much of India’s growth happened after the economic liberalization took place in 1990. Soon enough, companies began to sprout and took up outsourcing tasks that helped India to become one of the leaders of IT outsourcing. Access to cheap labor, English language speaking skills and good technical education has helped India to metamorphose into an economic giant. While American and British companies have continued to outsource to India, a new phenomenon can now be observed. Indian companies have begun to outsource domestically, whether it is IT, BPO or something else. As Indian companies have begun to become more successful, they are now able to outsource their own tasks to other Indians who can work to a lower cost and thereby, reduce overall costs. This has helped Indian IT companies to focus on their core areas, which is IT development. There are several reasons why domestic outsourcing is going to get even bigger in India. Here we shall list a few reasons: Large cities in India are getting expensive As Indian cities are getting overpopulated, they are also becoming ever more expensive. Cities like Bangalore, New Delhi and Bombay are some of the most expensive cities in the region. The cost of living has increased and employees need to be paid more. Hiring employees who live in the hinterland but have had a good education is proving to be a better idea than making people work at offices that are located in larger cities. Thus, domestic outsourcing is taking place this way. Indian BPO industry As more Indians continue to purchase, the trend of domestic BPOs have increased too. More companies are sprouting and their customers need contact centers to reach the companies. These companies outsource their customer service tasks to BPOs located within the country. Customer service is usually provided in English, Hindi and other Indian languages. Increased awareness about IT More and more companies have begun to understand the importance of IT and web development. Consequently, companies have begun to outsource IT related tasks to people located within India. This is also one of the reasons why websites are becoming increasingly popular in India. Indian companies have finally begun to understand the importance of having a website, many years after their counterparts in the U.S. and U.K. did. Outsourcing is getting easier More companies are now open to the idea of outsourcing their tasks to other Indian companies. While this was not the trend a few years ago, it certainly is today. Even legally, it is easier to send tasks to other companies in India than it used to be earlier. Bureaucratic issues have begun to be resolved and there is less red tape, which is one of the reasons why companies have begun to outsource domestically ever so often. Increasing profits for IT companies IT companies have consistently been profitable in spite of global recession a few years ago. All the profit has been utilized to expand business and create even more wealth. This wealth creation has helped Indian companies to widen their own core areas of focus, resulting in a situation where they can outsource simple and medium level tasks to other smaller companies within India. India’s outsourcing story is not one-sided but has come to be a way of life. Indian companies are open to outsourcing their own tasks to other companies and there are a number of companies that are willing to take up these tasks. One of the reasons why companies have begun to succeed is because they can outsource their tasks without having to worry about less important tasks. Thus, the growing areas for domestic outsourcing include IT, web designing, HR, customer service and a whole lot of other tasks. In the future, we expect Indian companies to become even more amenable to outsourcing than ever before.

We all know that outsourcing work to another company can bring about great results, cut costs and increase productivity in the long run. It helps us to focus on our core business activities instead of wasting time on things that we are not really good at. In fact, companies have been outsourcing work to other professionals from times immemorial. A blacksmith always tried to outsource the procurement of metal to someone else. That someone else was an outsourcing agent. Outsourcing is growing ever more important Today, it is a lot more sophisticated than that and there are clear legal & professional boundaries about what is outsourced, how it is outsourced and to whom. While all this sounds nice and attractive, people still do not understand the differences between the 3 confusing terms: outsourcing, offshoring and nearshore outsourcing. All three words are related to each other but are quite different from each other. In order to have a successful outsourcing process, we need to understand all three terms and make sure that we are not going wrong anywhere. It also helps to read up on the latest outsourcing techniques, tips and strategies. One of the best ways is to understand the differences between these three terms. Outsourcing vs. Offshoring Let us briefly take a look at what the three terms mean, with a case study as an example. Company X provides software maintenance services and has a huge office in San Francisco, California. The company has become increasingly busy and is not able to code or maintain the software programs of all its clients. Thus, it likes to get rid of a few of its responsibilities at a fraction of the cost. 6 months ago, it had hired 2 HR managers and a taxation officer, all of which increased the company’s expenditure. Tax experts in the U.S. cost a lot and H.R. managers with an MBA do not come cheap. It contacted another entity called Company Y, which agreed to take up the taxation responsibilities. Company Y is located in San Diego. Company X was still not satisfied with paying a lot of fees to its HR managers and decided to seek help from Company Z, located in New Delhi, India. Company Z is an expert at providing HR services to its clients. Indian MBA degree holders charge only a fraction of what their American counterparts do because the cost of living and education are both less when compared with the U.S. If we look at the above example, Company X clearly was overburdened and was not able to focus on its core business activity, which was to engage in software maintenance. It decided to outsource its taxation and HR responsibilities to other companies which are good at it. It outsourced the taxation tasks to Company Y and it ‘offshored’ its HR responsibilities to Company Z in New Delhi. When a company transfers certain tasks to a different company in order to save costs, gain expertise and focus on core business activities, it is called outsourcing. When the act of outsourcing happens offshore in a different country, it is called offshoring. Offshoring is when outsourcing takes place internationally. Contrary to what most people believe, outsourcing takes place mostly within a single country. Offshoring, on the other hand, is when outsourcing takes place across international borders, in order to save money, gain expertise and other benefits. Nearshore outsourcing: What the noise is all about Now let us assume Company Z often require new recruits in Company X to contact them. There is a huge time difference between San Francisco and New Delhi. Thus, Company X decides to outsource some of the HR responsibilities like making the initial contact with recruits to an entity, Company M, located in Buenos Aires, Argentina. Company M, which is located in Buenos Aires is very far from San Francisco but the time differences are not much. The process of sending work to a country that is not very different in working style, time zone or culture is called nearshoring. Thus, in this case, in order to beat the time difference, Company X transferred some of the tasks from Company Z to Company M, which is located in a nearshore location, in Buenos Aires. Nearshore activities are offshore activities that take place in countries that are similar in time zones, culture and working styles. What is reshoring There is also another term that many people do not understand. It is called reshoring. Reshoring is a term that is used to describe the process of bringing certain tasks back to the home country, for a number of reasons. This might be political, economic, professional or just about anything. If we should consider the case above, Company X suddenly received a notice from its directors that Argentina was going through an emergency because of political turmoil. Company M was shut down indefinitely in order to avoid protests on the streets. Company X then decided to temporarily outsource that part of HR tasks to another company in San Francisco, Company P. Tasks that were previously nearshored to Company M were restored to Company P. Offshoring vs. Nearshore Outsourcing: Which is better Offshoring technically means outsourcing work to a company that is located in a different country. Nearshore outsourcing refers to the act of offshore outsourcing work to a country that is closer in time zones, similar in terms of working style and not too different culturally. There are several benefits and disadvantages to both. Let us take the example of the U.S. and the U.K. When an American or British company wants to hire IT professionals, they usually seek Indian or Filipino professionals. This is mostly because IT professionals in India are cheaper to hire, have a better education and speak at least a decent level of English. American and British companies pay only a fraction of what they would have paid, had they hired professionals from their own countries. It is also possible that their own professionals are not

Business Transformation Outsourcing (BTO) is the branch of outsourcing in which the company revamps its selected processes to transform the business by following a collaborative approach with its vendor. Here, the company is actively involved in the outsourced operation and is usually accompanied by joint investment with vested interests. Of late, there had been a macro-level shift in consumer dynamics and workforce demographics making the old business models obsolete. A BTO project results in the development of technology-based transformations rather than simply lowering costs. BTO is evolving very fast as companies are seeking creative ways to innovate with the help of consultants. Quite often, it has resulted in the formation of a new organization staffed by both employees with its own gain-sharing provisions. BTO makes the company capable of responding quickly to the changing market trends and assist in the innovation of product, service or a process besides keeping a tab on the cost. It helps the company retain significant control over the outsourced service. With BTO, your organization can make sweeping changes to improve revenue, support growth, reduce costs, lower risk and develop the necessary capabilities to stay competitive. Business transformation outsourcing helps you get rid of wasteful processes and increase productivity, quality and customer experience. To keep the customers happy and gain market share in this highly competitive environment, business leaders are realizing the importance of business transformation outsourcing. Though most of the challenges facing the business are not entirely new it is the technology that is changing continuously entailing new roles and definitions for people and processes involved. A flexible business model is what you need today. How is it different from traditional outsourcing? BTO based model is more responsible towards its customers (outsourcers) as the customer is closely associated with the service provider during the entire project. A BTO project is a long-term proposition as it takes time to evolve and is not set with deadlines like in a traditional outsourcing project. It is more or less similar to a consulting agreement wherein the customer and the service provider agree upon a final strategic goal and start working backwards; and after the accomplishment of desired results after a period of say five years, the customer is less likely to renew such a project. As per the experts in the industry, business transformation outsourcing makes a lot of sense in today’s world as it holds the capability of cutting the rhetorical tasks of the traditional outsourcing process. Unlike traditional outsourcing, BTO is focused on continuous quality improvement. Strikingly, BTO and traditional outsourcing are neither mutually exclusive nor married as BTO facilitates continuous strategic change while outsourcing. Potential benefits of business transformation outsourcing • Exploring the full potential of the outsourced process – BTO project involves the identification of the problem in the outsourced process itself and finding an apt solution to fix it. It helps you identify growth opportunities and prioritize projects to be in-line with your company’s strategy. • Value addition – Value addition can be in any form. For instance, an outsourcing company decided to inform its customers about new products and offerings during inbound calls, thus, saving significant costs associated with marketing. • Customer-driven service model –  Respond quickly to changing customer requirements by understanding and improving each step in the customer experience cycle. • Leveraging the knowledge, experience and capabilities of the vendor – Besides innovation, the BTO process involves sharing resources with the vendor. As vendors have vast experience and enhanced capabilities by working across multiple clients, it is certainly beneficial for the customer to build upon that. • Mix of consulting services and traditional outsourcing – A BTO project is often marked by consulting services along with the traditional outsourcing tasks so that the customer gets twin benefits of consultation and outsourcing without having to go elsewhere. • Freeing up funds to allow investment – It allows your company to unlock the potential of locked funds, which can be directed towards a sustainable competitive advantage. Moreover, it helps you optimize your capital requirements to avoid redundancy. • Scaling infrastructure to meet demand and revenue growth – Infrastructure development is made flexible enough to adapt to volatile market conditions. It allows you to introduce new products and services with greater success. It also enables you to explore new markets and customers. • Carry out large scale changes with reduced risk – An experienced business partner will help you smoothly make that transition with premeditated risk factors involved. For instance, by shifting your fixed costs to variable ones, you can reduce risk exposure by minimising your investment in inefficient assets and reducing the amount of debt required to finance them. • Continuous process improvement – BTO is not limited to one-time cost saving as in business process outsourcing but continuously works towards process improvement. • Improved margins for your company – It helps your company to reduce Selling, General and Administrative (SG&A) expense through cost structures that can scale to meet peaks and troughs in demand. Factors to keep in mind before opting for BTO • BTO projects can impact multiple levels of an organization, and the customer must introspect whether the management can work in tandem with the service provider and accept constructive criticism from her. • Premeditate the impact of this transition on different departments of your company and the flexibility of approach required from them. Involve them from the very beginning to avoid bottlenecks later. • Analyse the impact it can have on your existing customers. • Evaluate the prospective vendors based on their customized strategy suiting your business need, track record and market credentials. Select the one that strikes a cord with your organization. • It is most appropriate to tie the vendor’s compensation with the success rate of the project. • Establish a goal for yourself rather than letting the vendor do that though you may fine-tune it with their support. • Do not get carried away by short-term business gains as a BTO project requires significant investment.

Managed outsourcing is the process of transferring key activities in your business to an external service provider to cut down costs, add value, improving operational efficiency without adding to your expenses. It helps the companies to focus more on their core competencies and bring significant returns on investment especially when the companies themselves lack in internal capabilities. Managed outsourcing service providers bring in their expertise in different categories, varied experience by dealing with multiple clients. Managed outsourcing may also involve procurement activity, which is either direct or indirect procurement. While direct procurement deals with procurement of your basic raw materials to run your company, indirect procurement usually involves support functions like marketing, IT and HR related services, office services etc. As a result, it is the indirect procurement, which is outsourced the most. Managed outsourcing often results in higher returns on investment, thereby, increasing organizational efficiency and effectiveness. Businesses often notice jumps in productivity. It enables your company to form stronger and more strategic relationships with suppliers. Managed outsourcing service providers add value to your business and help you to curb significant costs. In this article, let us take a look at what procurement outsourcing is, which comes under managed outsourcing too. Procurement service providers are the ones who have achieved a strong expertise in procurement of goods and services, especially, indirect procurement. They offer a wide variety of services including purchase transaction, spend analysis, category management, e-procurement services, supplier management and much more which shall be discussed briefly ahead. Main areas of outsourcing solutions: • Purchase transactions – All procurement activities involve purchase transactions. Processing of purchase orders, managing quotation request, invoice matching and payment are some of the most common purchase transactions. Experienced service providers efficiently handle these transactions. • Quality measurement and development – Strong analytical approach to measure quality, spending patterns and compliance to standard methods is deployed by service providers. Service providers ensure quality checks at different levels of product manufacturing or a service process. • Contract outsourcing – Legal weapon like contract negotiation becomes a tedious job when your company does not have relevant experience to negotiate terms and conditions with your buyers and suppliers. Moreover, it consumes a lot of time, which you can, otherwise, devote to your core business activities. By outsourcing your contract formation services to an agency brings your expertise from different fields. • Strategic sourcing – Strategic sourcing deals with corporate supply and sourcing strategies. Strategic sourcing is not focused only on cost but it concentrates on the total cost of ownership, thereby, incorporating customer needs, organizational goals and market conditions. Its aim is to get the best product or a service at the best possible price. Strategic sourcing is based on a collaborative approach and the decisions made are supported by factual analysis and market intelligence; and it is a continuous process that evolves with time. • Procure to pay system – Procure to pay is a process, which starts from creating a formal request for purchase to the payment entry in the general ledger. The intermediate processes involve creation of purchase order, invoice and payment of invoice. The efficient application of this automated cycle comes with many benefits for your organization. It increases your transactional efficiency, reduces transaction processing cost, enable quick dispute resolution and better collaboration with your vendors. • Category management – Category management involves the development of different product categories as a strategic business unit. It makes sure that sale of Product A does not get affected with the increase in sales of Product B. To add to it, companies have realized its importance from the fact that price negotiation is not enough for profit gains and increasing overall sales of the category is of primary concern. It also involves participation of supplier in the process. • Spend management – Spend management focuses on controlling business spends. The expenses could be related to operating cost, administrative cost or cost of any other business activity in the supply chain. Both indirect and direct costs form a part of spend management. Spend management helps you to avoid ad hoc expenses and increase spend economies of scale. It also takes into account VAT/Tax, fluctuation in cost of raw materials, demand, exchange rate factors to get a holistic view. • Tail spend management – Tail spends are 20% of your total expenses, which you make on 80% of your suppliers. As a natural approach, businesses tend to focus on 20% of suppliers who form a majority of your supplies. But in vain, they are not able to cut-down their expenses after a particular level. To come out of this approach, it is wise to start working on these unexplored business expenses, which are spread across 80% of your suppliers who do not form a majority of your supplies. There are many software that give you insight into tail spends. • Spend Analytics – Spend analysis is crucial to your business to give you valuable insights into your spending patterns. It comes with many benefits. The sole purpose of this task is to reduce procurement costs, improve operational efficiency and monitor contracts/purchasing policy compliance. It counters issues like supply risk and ad hoc spending. Activities like inventory management, budgeting, research and development also come under the purview of spend analysis. • E-Procurement services – E-procurement services refer to online buying and selling of goods/services. Buyers and sellers meet on internet and specify their requirements/quotations. Ongoing purchases may qualify the customers for bulk-buying discounts and special offers. E-procurement software helps the businesses to automate their buying and selling process, and thereby, save cost of transaction and manage inventory cycles. Therefore, it forms an integral part of supply chain management. • Supplier management – Maintaining relationship with your suppliers involves co-ordination among the two parties across business and functional touch points. Supplier management focuses on strategic alliance with your supplier to maximize value, reduce risk, achieve competitive edge and deliver escalated levels of innovation. It helps you enhance relationship with your key

When a company hires a third party to perform all or a part of their HR functions, it’s known as Human Resource Outsourcing. Most of the times it’s the smaller firms that outsource their entire HR function. The larger firms prefer to outsource only few specialized functions like Pension & Health Plan administration, so that they can pay closer attention on the other important functions. HRO ENTERPRISE HRO DISCREET HRO Outsourcing of the entire HR Function Outsourcing of a single process in the HR Function There are many things that one must bear in mind before outsourcing one’s HR functions. Good human resource management software programs come with similar core functions. However many of them differ on various aspects that is difficult to describe in a single article. However, we have made a list of factors that you should most certainly look for while choosing an HRM tool. Some of the most important functions of HRM tools are: • Managing personnel information: The tool that you purchase or install must support all kinds of employees. Whether they are full time employees, contractual workers, interns or freelancers, their information should be properly entered in the HRM tool. In fact, a tool that works closely with Hr department must also be able to enter information of all kinds of working relationships. • Self-service of management: Whether it is an employee or a manager, they should be able to enter information and manage their records to an extent. The HRM tool should also provide users with facilities to access information, retrieve data and also make changes when required. Thus, even employees should be able to access certain areas of the HRM tool. • Absence management: There is nothing more important than managing your employees leaves and absences. Whether they fall sick or they are on leave because of official work, employees should be able to apply for leave permits on their own. This will reduce a lot of problems that a manager might encounter later on. • Time and attendance: A good HRM tool tracks at what time an employee logs in or enters an office’s premises. It also tracks how long they stayed within the campus and when they left. IT makes sure that precious man-hours are not lost and that those precious hours are not lost in thin air. • Benefits: The HRM tool must also be able to monitor and configure insurance, provident funds, loans, pensions and healthcare. This will ensure that there are no disputes between employers and employees at a later stage. Moreover, it also ensures that a lot of time is saved. Such information will need to be pulled out occasionally and thus, accessing such information should be very easy. • Payroll: A good HRM tool must be able to calculate the number of hours worked, overtime, bonuses given to a particular employee, deductions, taxes, and contributions. All the information needs to be entered accessed easily. HRM tools that make this unnecessarily difficult will end up causing a lot of trouble to companies than helping them in any way. • Position management: An efficient HRM tool should be able to describe positions, list employees roles and their hierarchy, draw organizational charts, matrices and such other graphical information. It is crucial for HR managers to access this information on demand. • Analytics: A serious HRM tool will also provide enough analytics to predict and analyze future trends in workplace. It will offer crucial data about employee trends and how they may behave in the future. • Mobile support: Now that everyone carries a smartphone, an HRM tool must be available on every smartphone that is worth considering, including iOS devices, Android, Windows Mobile and BlackBerry. We have listed 5 of the most used HRM tools today, especially from an outsourcing perspective. Given below are those 5 tools and a brief description of each of the 5 tools. • SAP ERP HRM SAP ERP HRM goes by the service name of ERP Human Capital management and is licensed by the parent company SAP. With more than 500 employees, SAP is one of the largest IT companies in the world. Without a doubt, SAP ERP HCM is also one of the most popular HRM tools around. The tool not only helps employees to achieve their career goals but also helps employers to attain and achieve their business objectives. It leverages SAP ERP software and helps companies to streamline, automate, and run ERP and HRM processes that are often complex and difficult to handle. You could also go ahead and automate employee administration, which is one of the most important aspects of an HRM tool. SAP ERP HCM comes with features like time management, payroll administration, reporting of legal processes and a host of other features that make it very popular among users. It helps companies to attract and hire the right kind of people while making newly hired recruits more productive. Once they are recruited, their progress and contributions can be effectively tracked and monitored. • Oracle Fusion Oracle Fusion also goes by the name of Fusion Human Capital Management and is licensed by Oracle, one of the largest service providers in the world. With HIPAA and SAS 70 Type II compliance, Oracle Fusion is the HRM tool of choice for many people. It comes with telephone, email, online and 24 x 7 support that can be used to troubleshoot problems. It offers support for mobile devices and has a specialized iPad app. The tool enables companies to engineer a global foundation of HR data that will ultimately help companies to improve business processes. It helps companies to increase productivity and lower costs by accelerating performance. Oracle HCM Cloud makes use of cloud computing to ensure that a lot of storage space is not occupied. Cloud services are available via subscription and are a great way to ensure that your data is safe and available at all times. It can be used for global HR processes, goal management, compensation,

The concept of outsourcing is nothing new and has existed for hundreds of years, if not for thousands. During the earlier days of Industrial revolution many of the businesses being frugal, started switching the production of their goods to countries with cheaper labour force. With a development in the routes of transport more countries started outsourcing their trade to other countries, gradually leading to outsourcing to India and other countries. Today outsourcing is gaining more popularity due to a lot of reasons. Unlike earlier times, outsourcing is not done only to reduce costs but for several other reasons: • Concentrate on core competencies • Increase productivity • Acquire skilled work force • Provide the customers with low cost goods Outsourcing is the process of hiring a third party to perform the non-core functions so that the business can pay more attention on its core competencies. For e.g.  How many of us have the time or money to respond to every call and e-mail, buy gifts, and pay the bills?  A personal assistant could be hired to take care of all this but it might not be feasible. The solution for such problems is to hire a company that provides a group of skilled assistants to take care of these petty jobs at a much lesser cost. Outsourcing can be broadly classified in to • IT Outsourcing • Knowledge Process Outsourcing • Business Process Outsourcing • All IT functions or a part of it is outsourced. • Pay roll, internal auditing, billing, data entry, editing, answering phone calls etc. • Content writing, legal services, animation, intellectual property research etc. IT outsourcing and India In this day and age, where information technology has become crucial to the existence of a business, it is essential that every business has a well-built IT system in place. The cost incurred in terms of money, time and people to build up your own IT management team is exorbitant. Hence almost every business prefers to have a third party handle the entire or a part of its IT function. Despite having many major competitors like China, Japan, Mexico etc., India has managed to become the most favourable outsourcing destination. IT industry has existed in India for a very long time, but it was completely under the control of the government. A few decades ago, the Central government of India introduced policies to encourage commercial participation in the telecom industry. India is one of the countries with a large English-speaking population. It has a big group of skilled work force who speaks English apart from their regional languages. The group of skilled work force is expanding with an increasing number of students graduating every year. IT companies have divided their work force in to night and day shifts to ensure 24×7 services. This helps in bridging the communication gap resulting from difference in time-zones of both the companies. India also has its own set of hi-tech infrastructural facilities and services that are aligned with the international standards like ISO, six-sigma and so on. So it’s not the number but the quality of the work force & infrastructural facilities that makes India as one of the most favourable outsourcing destination. Future of outsourced IT management in India The future of the outsourced IT management in India depends on how it tackles deals with the changing trends: • According to the reports from NASSCOM Engineering Summit 2013 the future of outsourcing doesn’t lie with the IT sector alone. There will be a gradual movement towards electronic, mechanical & aeronautical engineering. Research & Development has a crucial place in the development or advancement of any technology and it demands a group of skilled work force and infrastructural facilities. India might have a large pool of multiple skilled people, but it lacks the ability to tap the right type of skilled worker and also the social security laws needed to conduct background verification of these workers. The development in terms of infrastructure is also negligible. Hence the companies and the government should work together to ensure adequate supply of skilled workforce and hi-tech infrastructural facilities. For example: ‘Power To Empower 2013’ is a programme launched by India@75, Confederation of Indian Industry and the National Skill Development Corporation that aims at encouraging the young students and entrepreneurs. Another example would be: ‘Aadhaar Diffusion Project’ by NASSCOM, which aims at building an identity infrastructure that helps in authenticating an individual’s identity anywhere and anytime. • The IT Industry aims at providing customers with high quality goods at low prices. With increasing labour costs in larger cities, many outsourcing companies are actually encouraging attrition. This has lead to high levels of stress and chaos amongst the employees, which sometimes deteriorates the quality of their work. Hence companies should slowly move in to smaller cities where cost of labour is lesser. • India is yet to realize the importance of patenting its intellectual property so that it can retain a competitive edge over the others in the market. It might be too late if a competitor patents IT processes before you do because this will prevent you from using the same processes. • “You should do only what you do best in-house, and outsource the rest.” – Late Dick Benson. Over time, clients are going to outsource more of their business processes or services. Thus companies with experience in back office operation get an opportunity to deal with more complex processes or services. It isn’t as easy as it sounds. For a very long time India has had only IT clients and very little attention was paid to other aspects of business. If the company has to find a way up the value chain, it’s essential that they learn to communicate effectively and work efficiently with other businesses too. This doesn’t mean that the front office operations are more important while compared to back-office operations. One aspect cannot be prioritized over the other. For a country like India with a large group of work force