Outsourcing can be a key 'enabler' for India's growth
By siliconindia   |   Wednesday, 01 August 2007, 19:30 IST
Printer Print Email Email
Bangalore: As India makes rightful place amongst the economically mighty nations, rapid and sustainable growth in its wealth in recent times is particularly visible in the growth of sectors such as telecom, organized retail, insurance, healthcare, hospitality and airlines. According to a study titled 'Staying on Course with the Growth Agenda - Potential for Outsourcing to Drive India's Growth Sectors', by the Everest Group, a global consulting firm specializing in outsourcing and offshoring advisory services, outsourcing can act as a key 'enabler' and catalyst for these growth sectors in India in multiple ways, ranging from release of scarce capital, providing quality talent, innovative practices and management bandwidth. Elaborating on the potential and relevance of outsourcing for Indian companies, Gaurav Gupta, Country Head, Everest Group, said, "So far, India has been seen as a leading supplier destination in the outsourcing arena. Its potential as a buyer of outsourcing has not yet been explored to the fullest. Today, sectors like telecom, organized retail, insurance, healthcare, hospitality, and airlines in India are witnessing unprecedented growth, which will further be fuelled by the increasing entry of global players. It will be important to address the resultant operational growth challenges in these sectors to ensure that they maintain their momentum, and establish a flexible and competitive operating model." Citing reasons why despite such huge potential, outsourcing in India has not gathered momentum so far, Vikash Jain, Engagement Director, Everest Group, who co-authored the paper says, "While the potential is huge, the Indian market continues to be nascent. Solutions, commercial models, and contract structuring in India do not reflect the level of maturity in other developed outsourcing markets. The key reason for under-development in this area is that so far there is limited understanding of the outsourcing value proposition. Buyers are not clear of the onshore outsourcing proposition and Indian suppliers have been focused on the international market. The pressure to deliver significantly higher margins compared to their international peers and inability to attract quality talent for domestic work has resulted in Indian suppliers shying away from lower margin domestic work." However, Jain further concedes, "Whereas Indian suppliers have largely missed the domestic opportunity, some international suppliers have taken this opportunity to corner most of the mega deals over the last 3-4 years."

siliconindia