Leading global business intelligence and consultancy firms such as Giga, Forrester Research and McKinsey & Co. have cited various reasons for the increase of offshore outsourcing by MNCs to India. Outsourcing is expected to grow to at least 23 percent during 2002. India's quality and cost benefit edge is one of the major draws for these organizations, analysts say. Giga predicts that, compared to other competing countries such as China, Ireland, Israel, and the Philippines, India will continue to dominate as the preferred off shore country.

Why Setup an Offshore Outsourcing Unit?

Forrester Research meanwhile indicates that by 2003, a larger number of companies will engage offshore providers and their budgets too will grow rapidly. There will be an increase from 12 percent of technology budgets today to 28 percent in 2003. According to a study conducted by Forrester in November, 2001, India's edge over other competing nations in the IT outsourcing business is based on the country's decade old experience in this area, fluency in the English language, supportive Government policy infrastructure, and high quality offerings.

A captive center is one way of leveraging the cost advantages of the supplier country while retaining the work within the company. For others, data security and privacy are vital and the legal implications of a lapse in these areas could be daunting. Lack of domain knowledge among third parties is another reason for the setting up of captive units. A case in point is Prudential, the UK-based financial services giant that recently set up a captive unit called Prudential Process Management Services India Private Limited (PPMS). PPMS had considered the option of outsourcing but eventually decided to set up a captive unit. PPMS believes that a captive center is the best as they can maximize the learning that Prudential has to offer. An offshore captive center has some concrete advantages such as greater data security and control over quality, building and transferring knowledge across physical geographical boundaries and compliance with statutory norms and regulations.

Today, MNCs are rushing into India to stake a claim to the IT & ITES outsourcing market. While a large number of companies are outsourcing their software development to Indian companies, others are establishing a presence in India and participating actively in the software export game. The MNC sector emerged as an important segment contributing Rs 9,855 Crore of the total exports of Rs 35,600 crore in the year 2001-02, translating into 27% share of the total exports.

What Can You Use an Offshore Unit For? Some Examples

• Inbound or Outbound Call Centers

• Data Processing or Back Office Units for Credit Cards, Insurance or Mortgage Processing

• Medical Transcription, Medical Billing & Accounts Receivable Back Office

• Software Development including Internet Technologies

• Product Development

• Research and Development in verticals like biotechnology, artificial intelligence or any other vertical

• Animation or Designing

Why Interactive World?

For you to setup an offshore unit successfully, in time and within our budget, our resources give you a big picture of the overall market and channel strategies, so you can see how to better fit your offshore unit into them. We also advise you on outsourcing options, site selection, agent and manager recruitment & training, and analyzing your center's performance.