The Advantages and Disadvantages of IT Outsourcing
India has emerged as one of the preferred destinations of outsourcing projects, services and operations, mostly from the domain of IT (Information Technology) and ITES ( Information Technology Enabled Services) in multiple industries like Healthcare, Advertising and Media, Aviation, Travel etc. The country has young, talented and relatively cheap workforce which yield the envious blend of quality and cost-efficiency. However, outsourcing is not always laden with advantages but there are some disadvantages too.
Advantages of Outsourcing to India
Perfect quality: The Indian firms practice stringent quality measures, at par with the global standards, so the projects and services do not have any quality compromises.
Lesser cost: The cost of resource in India is way too less as compared to the developed economies. This helps in significant cost reduction for the firms that decide on outsourcing to India.
Familiarity with Global Languages: Most of the resources are well versed in spoken as well as written English. This helps in a clear communication which is essential for the successful management and completion of the projects.
Focus on Key Business Areas: Outsourcing other process like customer care, back-end etc can help to control the diffusion of focus. This way, firms and organizations can concentrate on areas of key competence.
Every coin has two sides and outsourcing to India has some flip points too, thus vindicating the notion.
Exposure to risk: Though it seldom happens, but if the project is left in mid-way then there is very little a company can do besides taking legal action. The risk becomes larger in case of assembly-line process where the next step depends on the previous step that has been outsourced.
Scope and Budget enhancement: If everything has not been clearly mentioned then there are chances that the project will escalate its scope. This can result in painful delays and cost increment.
Communication Problems: Although most resources are adept in English, still there might be some problems caused by misinterpretations.
Reduction in Employment: This is a major issue that has seen much opposition on outsourcing. If the projects are outsourced then it means they have been done at the cost of the resource of the native country.
However, the huge benefits of outsourcing to India dwarf the disadvantages which are the reasons that outsourcing has always seen an upward trend.