Outsourcing began as as cost-effective measure. Now, India has much more to offer in terms of improved productivity and quality. Hence, more than 82% American companies prefer to outsource to India.
The effects of liberalization of Indian economy:
The Indian economy has opened up, ready to stake a wider claim in the world economy. As a part of the efforts to liberalize the economy, the successive governments from the 1990s have invested heavily in developing the necessary infrastructure.
India has a better a transport and communication system than any developing country. Internally, India is well connected by good quality roads and railways. Air travel is much easier and cheaper than before thanks to privatization. The growth of television, telephone and most importantly the internet has had a major role in making India a good choice for outsourcers in the U.S or U.K. Receiving and sending data and day-to-day communications has made business easier. Information Technology continues to be the focus of government policies.
The banking sector too has seen many changes. Now many foreign and private banks compete with nationalized banks. Competition has made them more efficient. Relaxations in forex restrictions, full convertibility of the rupee, the easy availability of credit, lower interest rates, liberalization of taxation policy have all created suitable conditions for outsourcing.
Education in India:
India has been able to measure up to the outsourcing requirements because of a well-developed education system. There are a million graduates in India every year. For a change, India's population explosion has had a positive effect. A sizable chunk of young people are looking for employment and are only too happy to take up jobs in BPOs and call- centers. Not only in terms of quantity, but also in terms of quality India is much superior. Indian engineers and software programmers are world class. Indians have made their mark in the fields of biotechnology, medical-care and business administration. Indian service providers are able to offer quality service cheaply.
Knowledge of the English language:
Many regional languages are spoken in India. Many people, especially in southern India, prefer English to Hindi as the medium of communication. English has emerged as the lingua franca. Indians send their children to English medium schools with much pride in the belief that it would open up more employment opportunities. English is the language of the computers. Knowing English is crucial for one who wants to work in BPO or call centre. Ability to understand, converse and write English has given the Indians a definite edge over their Chinese counterparts in outsourcing.
Being on the opposite side of the globe to U.S. has given the advantage of time to India. The service is much faster if outsourced to India especially while processing bills, insurance and medical documents.
Security not a grave problem:
Out sourcing, its critics say, is a threat to the security of data. However, the Indian professionals have been very scrupulous. Frauds have been negligible. The IT Act passed in the year 2000 by the Indian Parliament has also helped check cyber crimes.