With its rich experience in offshore services and an enviable talent pool to boot, India is one of the most sought-after offshoring destinations. As international firms are focusing on lowering costs, there has been a flow of offshoring, especially of non-critical roles,to low-cost nations.
According to US-based Hackett Group Inc, North American and European companies will move 750,000 jobs in IT, finance and other business services to India and other low-cost nations by 2016.
Here is a SWOT analysis of India:
Strengths
. Skilled workforce and huge talent pool (4.4 mn graduates and postgraduates join the workforce annually)
. Specialised labour pool from existing KPOs (India was the first to enter the outsourcing and offshoring market)
. Favourable and supportive policies for offshoring
. Larger English-speaking workforce, compared to other offshore destinations
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Graphics | New business services jobs moving to low-cost geographies, 2012 - 16 (%)
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Graphics | New business services jobs moving to low-cost geographies, 2012 - 16 (%)
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Weaknesses
. Time-zone difference with the US
. Focusing on developing infrastructure in tier-II cities, but experienced talent pool is not ready to move there
. Tier-II cities lack in skill availability at mid- and senior-level management
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Graphics | Countries preferred by various organisations for offshore finance functions
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Opportunities
. Tier-II cities are one of the most cost-effective destinations in the world
. Increase in workforce and talent pool in tier-II cities
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Graphics | India's talent pool FY12 (%) (total 4.4 million)
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__________________________________________________________________________Graphics | India's talent pool FY12 (%) (total 4.4 million)
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Threats
. Rising operating costs in tier-I cities (salary increase and rise in rentals)
. Competition from new offshoring locations such as China and the Philippines
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Graphics | Operating cost per FTE for transactional KPO services, 2011 ($ ‘000) (per annum)
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Graphics | Operating cost per FTE for IT services, 2011 ($ ‘000) (per annum)
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Graphics | Operating cost per FTE for transactional KPO services, 2011 ($ ‘000) (per annum)
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Graphics | Operating cost per FTE for IT services, 2011 ($ ‘000) (per annum)
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