After careful analysis of the associated pros and cons, based on the strength of the analysis I conducted with special emphasis on looking at it from a human resources perspective, I have decided to recommend India as suitable location.
To stay competitive, keeping operating costs low makes a significant difference. Similarly when in the midst of a recessive economy, firms cut costs in order to survive the downturn. Labour costs that is a key component of the cost structure, is really low in developing nations like India, China, Philippines etc. Offshoring operations to these countries, allows these firms to reduce costs drastically for the same operations when compared to doing it at the home country.
Therefore firms may contract their operations to a third party in a low cost country which is called outsourcing, or the firms may set up operations by transferring the work to their own local company that is called offshoring. Notwithstanding the differences, outsourcing and offshoring are used interchangeably often.
Regardless of the benefits, the IT service industry puts the worker and the customer in direct contact so outsourcing is not devoid of some challenges. The human resources component has be to carefully assessed before embarking on this endeavour.
TheIndia: A potential location
Overview: Some useful facts
The economy of India is the fourth largest in the world as measured by purchasing power parity (PPP), with a GDP of US $3.36 trillion. When measured in USD exchange-rate terms, it is the tenth largest in the world, with a GDP of US $691.87 billion (2004). India was the second fastest growing major economy in the world, with a GDP growth rate of 8.1% at the end of the first quarter of 2005-2006. (Source from website http://en.wikipedia.org/wiki/Economy_of_India) The Rupee is the only legal tender accepted in the India and is pegged to the US dollar and the current exchange rate hovers around INR44 to 1USD. India is the world's largest democracy and has a population of more than 1 billion.
The liberalisation reforms of 1991 opened up this conservative country and its growth has been fuelled by it, making it an attractive potential to be tapped. Foreign investors were benefited by the ability to make investments in business and this has made India an appealing offshoring destination. USA is the largest foreign investor in India. A number of MNC like GE, Dell, IBM, Honeywell all have huge operations in India. Doing business in India is all not smooth sailing though, and they are risks and roadblocks to conducting business in India.
India is steeped in tradition and its people are by