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.
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