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Recession Time �C Is It The End Of Offshore Outsourcing? by Maneet Puri
The impending economic crisis has taken heavy toll on the world economy and organizations across the globe are faced with no option other than to lay off their employees. It��s recession time for corporates, both big and small.
In times when businesses seek to cut costs by offering pink slips to their manpower, what future does offshore outsourcing have? Is it the end of the concept?
These are the questions plaguing the numerous service providers and industry experts of the Indian outsourcing industry. While the situation seems grave,[link widoczny dla zalogowanych], the cloud will probably clear in some time. And as a new economy dawns, there would be corresponding impact in the outsourcing industry as well.
Value Addition for Outsourcing Service Providers
Many offshore service providers are all set to move on to provide higher value work tasks for their clientele apart from the regular transaction work. Because of long-term affiliations with clients of the industry segment and valuable industry experience, the service providers have in-depth understanding of the processes and thus moving up the value chain comes as a natural consequence.
And for businesses that make use of outsourcing services, if their current service provider fails to evolve with the times, there are plenty of other options to choose from. The fact that outsourcing businesses have come down also reinstates the fact that the market has become much more competitive than earlier. And to match up,[link widoczny dla zalogowanych], service providers need to offer specialized services.
Battle for Jobs
While Obama government declares tax breaks for organizations that keep jobs onshore U. S. locations,[link widoczny dla zalogowanych], Indian government��s STPI has other plans. Software Technology Parks of India has plans to include tax schemes that grant tax breaks to new Indian companies that belong to the software sector.
IT services are the cheapest in countries like India and even if additional taxes are levied on American companies that outsource their business proceedings,[link widoczny dla zalogowanych], it won��t be cause of much worry. This is because inspite of the tax additions, the profits they make will ultimately outweigh their investment costs. A small tax figure is hardly going to affect the grander scheme of things i. e. the outsourcing model.
IT Service in India
IT services constitute an important part of the Indian economy with basic programming skills available wide across for mainstream applications. Therefore any impact on the IT sector would be felt across the nation and shake has direct implications on the national economy.
Even if U. S. rates of programming costs have come down significantly over the past times, the quality of services offered by programmers in India cannot be beaten. Offshore locations are still the preferred choice as far as IT processes are concerned.
The battle for jobs comes for business processes that require industry-specific expertise. This is one area where offshore outsource service are at par with onshore ones. This has given rise to the trend of offshore providers setting up delivery centers onshore.
With the new economy on the verge of emergence, we as nations have to be prepared for it and anticipate new changes that it brings along.
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