Global Cos keen on outsourcing more to India

By agencies   |   Monday, 26 December 2005, 08:00 Hrs
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NEW DELHI: The Indian dominance over the outsourcing business is likely to continue. Global firms have comprehensively voted in favor of offshoring assignments to India over other emerging destinations such as Eastern Europe and China during the next three years.

Moving forward in this direction, the Indian offshoring pie is also slated to extend beyond the traditional IT and call-center business to include newer areas. According to A T Kearney’s FDI Confidence Index survey, these areas include research and development (R&D), along with process off shoring such as human resources, engineering and accounting functions. The Indian off shoring business, dominated so far by contact centers and IT services assignments, is likely to see more business in research and development and engineering, along with business process assignments.

About 14 percent of the global firms responding to A T Kearney said they plan to outsource the entire business process, including human resource and finance assignments. Around 10 percent planned to outsource R&D and engineering functions to India. This service is expected to go up in India, with India and China being ranked as the most preferred countries for future R&D investments, according to the study.

Slightly more than 40 percent of the CEOs indicated that they would be likely making such investments in these markets over the next three years. In the case of China, manufacturing functions are expected to dominate with 48 per cent of the respondents planning to outsource manufacturing assignments to the country during the period.

Among the firms that are already off-shoring business functions, an overwhelming 51 percent said the work was up to their expectation, while 9 percent said it exceeded performance. Only 17 percent said that their outsourcing experience was below expectation.

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