The last two decades have witnessed an unprecedented flow of services toward Asia. India, in particular, appears to have been the chief beneficiary for qualified services. According to the A.T. Kearney Global Services Location Index, 2011, India ranks highest as offshoring destination. Given the immense poverty of a large percentage of the population, it seems worthwhile to inves-tigate how India managed to become a solicited provider for high-tech services. However, there are alternatives for investment. Other Asian nations court investors with lower prices and an improving quality. Among them is China that attempts to supersede India as most popular service offshoring destination. Where will be the back-office of the future?
Table of Contents
A) India lures Offshoring Investment
B) IT Offshoring in India
I. Recent Developments
II. Determinants of Success
1. Strengths of the Indian IT Offshoring Market
2. Weaknesses of the Indian IT Offshoring Market
III. Alternatives on the Asian Market
1. South-East Asian Alternatives
2. China as IT offshoring destination
C) The Trend of India’s Competitive Edge
Objectives and Core Topics
This paper examines IT offshoring in India from an investor's perspective, aiming to identify the key strengths, weaknesses, opportunities, and risks associated with relocating services and departments to the Indian market.
- The impact of emerging business models like Cloud Computing on IT offshoring.
- Strategic analysis of India's labor market, educational standards, and demographic developments.
- Evaluation of infrastructure challenges and corruption as risks for investors.
- Comparative assessment of competing Asian markets, specifically China and South-East Asian nations.
- Long-term competitiveness of India versus the emerging potential of China in the IT services sector.
Excerpt from the Book
B) IT Offshoring in India
By 2011 the Indian IT service industry faces two main trends. One recent trend is the emergence of Cloud Computing as a business model. Another current phenomenon is the surge in average wages in traditional IT centers such as Bangalore. The latter development undermines India’s competitive edge as a repudiated provider of low-cost services.
Cloud Computing is a concept that proposes integrating software and hardware resources into a network, e.g. the Internet, in order to cut costs. In this concept, clouds represent an ample pool of accessible virtualized resources that can be adjusted to customers’ needs. Customers idiosyncratically follow the pay-per-use model, i.e. they pay precisely for the services they utilize. For a plethora of IT service providers this shift in technology stands for change in their business model. Today’s IT companies are challenged to enlarge their service in order to meet comprehensive customers’ requests while driving down costs. Nonetheless, it appears that Indian IT businesses are doing well in the race for cloud solutions. According to a survey conducted by VMware Inc., India leads the paramount Asian nations in terms of adoption plans (43% of all national IT firms) followed by China (39% of all national IT firms). Thus, it is safe to say that Indian companies are well poised to weather the coming competitive storm due to cloud-based services.
Another predominant factor to be considered is the second trend of avoiding traditional high-tech centers. As early as 2007, a few American companies decided to withdraw service centers from Bangalore, the much heralded Silicon Valley of India. As average savings due to IT offshoring have decreased globally, this trend has continued.
Summary of Chapters
A) India lures Offshoring Investment: This chapter introduces India's role as a primary destination for global IT services, highlighting advantages like English language proficiency and an improving educational landscape.
B) IT Offshoring in India: This section analyzes current industry trends, including the shift toward cloud computing, wage inflation in tech hubs, and the specific strengths and weaknesses of the Indian market compared to Asian alternatives.
C) The Trend of India’s Competitive Edge: This chapter synthesizes the findings to forecast India's future as an offshoring leader, weighing the rise of competitors like China against India's established corporate capabilities.
Keywords
IT Offshoring, India, China, Cloud Computing, Investor Perspective, Wage Inflation, Infrastructure, Market Analysis, Competitive Edge, Outsourcing, R&D, Demographics, Education System, Technology Services, Business Strategy.
Frequently Asked Questions
What is the primary focus of this paper?
The paper explores the landscape of IT offshoring in India from the viewpoint of a foreign investor, identifying critical success factors and risks.
What are the central themes discussed in the work?
The work covers technological trends like cloud computing, the impact of labor costs, infrastructure challenges, and the competitive environment within Asia.
What is the core objective of the research?
The goal is to determine the strengths, weaknesses, opportunities, and risks inherent in outsourcing business processes to India.
Which scientific approach does the author use?
The author employs a comparative analysis approach, benchmarking India against other Asian economies such as China, Malaysia, Vietnam, and the Philippines.
What content is covered in the main section of the book?
The main section details recent industry developments, analyzes determinants of success (strengths/weaknesses), and evaluates regional alternatives for IT offshoring.
Which keywords best characterize this publication?
Key terms include IT Offshoring, Investor Perspective, Competitive Edge, Market Strategy, and Asian Competitors.
How does Cloud Computing affect the Indian IT market according to the author?
The author notes that while cloud computing challenges traditional business models, Indian firms are successfully adapting and currently lead Asian nations in cloud adoption plans.
Why is infrastructure considered a risk factor in India?
Infrastructure congestion, including power and telecommunication issues, is identified as a significant hurdle caused by rapid urbanization that the government is currently struggling to address.
What role does corruption play in the Indian IT offshoring sector?
The author observes that while corruption is a pervasive issue in India, the software and IT services industry is largely insulated from it due to lower dependence on direct governmental decisions.
How does the author characterize the future competitive relationship between India and China?
The author suggests that while India holds a competitive edge for the next nine years, Chinese government incentives and an increasing focus on R&D may allow Chinese companies to eventually supersede Indian providers.
- Arbeit zitieren
- Daniel Müller (Autor:in), 2011, IT Offshoring in India, München, GRIN Verlag, https://www.hausarbeiten.de/document/179553
