History of Outsourcing to India



The Outsource to India was first enabled by progress in telecommunications in the second half of the 20th century. Previously to low cost telecommunications and the internet, managing services in distant locations was too costly, difficult, and risky. Well trained low-cost workers were available in the global market, but western managers did not have the tools to effectively tap into the resources. For the period of the 1980s it began to change. Modern conveniences such as inexpensive telecommunications and air travel, and rise of the personal computer and internet completely transformed the cost-benefit equation.


In the past, the majority large companies tended to manage most activities in house. In the 19th century, firms focused on vertical integration for economies of scale. In the first part of the 20th century firms used vertical integration to secure inputs and reduce costs of interacting with suppliers. However, the concept of vertical integration lost its luster in the 1980s, and in 1990.

  • Outsource to India has two key benefits. Initially, it frees a firm to focus on where they best add value. Secondly, companies gain the benefits of working with a best in class partner that is focused on the outsourced activity.

  • At the beginning of the 19th century, outsource to India had one of the largest economies in the world, second only to China. However, over the coming years the economy stagnated while others grew. In 1947 the subcontinent achieved independence from the British and was partitioned into India and Pakistan. Partition triggered significant turmoil and dislocation which helped drive the Indian economy to a low point in 1952 when it was approximately 7% of the size of the US.

  • By the late 1980s the government started easing restrictions and liberalizing the economy and since 1990, the country has seen fast economic growth typically in the 7-8% range. Outsource to India has a long history of organised education that goes back thousands of years. Previously to the British, outsource to India had a well enhanced region system. Much of this was uprooted and replace with a more western structure and content. While much was lost in the transition, outsource to India emerged with a world class set of universities including the famous India Institutes of Technology (IIT). While producing a limited number of graduates, IIT is considered one of the top technical universities in the world and by some metrics, the most difficult to get into.

British Airways and other global airlines started conducting back office operations in New Delhi in the mid 1980s. They were quickly joined by firms like American Express that consolidated regional back office operations. In 1985, Texas Instruments set up the first multinational technical design center in Bangalore.


Since then outsource to India has continued rapid growth. As of 2008, around 0.7 million people work in outsourcing sector(less than 0.1% of Indians). Annual revenues are around $11 billion, around 1% of GDP. Around 2.5 million people graduate in India every year. Wages are rising by 10-15 percent as a result of skill shortage


However the has been lots of assumption and negative criticisms against outsource to India. Although outsource to India as a phenomenon is not new but has been going on since ages. Prior to IT revolution, many companies in the US outsourced manufacturing jobs to counties like Canada, Mexico and South America in order to cut costs. Many even set up separate workstations and factories in these regions. The only difference between then and now can be seen in the frantic pace at which things are happening.

Outsource to India offers significant improvements in quality and productivity for overseas companies on vital parameters such as number of correct transactions, number of total transactions, total satisfaction factor, number of transactions/hours and the average speed of answers.

  • At present, outsource to India has almost become the order of the day. So why are global organisations choosing outsourcing? More and more global companies are choosing to outsource to India for a number of reasons, such as, cost-effective services, increased efficiency, increased productivity, shared risks, reduced operating costs, increased quality, better services and more time to focus on core competencies. These are just a few of the reasons why organisations are outsourced to India today. But why outsource to India and why do companies outsource to India. India is the most ideal place to outsource to, because India offers several advantages.

  • Outsource to India has leaded the way in providing outsourcing solutions and has been providing a range of outsourcing services to countries across the globe. Today, India can be called as the world’s outsourcing hub. Outsource to India can help your organisation benefit from cost-effective services, high-quality services, reduced operating costs, greater flexibility and faster-time-to-market amongst others. These are just a few reasons why companies outsource to India. Another reason why outsourcing to India makes good business sense is because India has high-end technology and best-of-breed infrastructure. India has now become the world’s most preferred outsourcing location. India is also the global hub for software enabled services and software development.

  • Outsourcing in simple terms is, sharing or transfer of responsibility. It is all about hiring someone else, to acquire services. Companies either outsource a part of business process or, take help in the infrastructure management. It’s totally crucial that the two partners work in tandem with each other. This would motivate a huge reduction in costs, and quality solutions could be delivered.

  • Outsource to India has made it possible to be a great deal of freedom. Managing your work force as per the tasks in hand doesn’t sound quite possible. Outsource to India makes it achievable. One can actually get the workforce required for a particular project.

  • Outsource to India can develop the world economies in future and with the change in technology one has to embrace new things in order to take a step forward in life. Outsourcing Industry in India is in its maturing stage, and the future definitely looks bright. The experience of outsource to India has been, and will be memorable for organisations.

  • Outsource to India - Problems/Disadvantages...Read More

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