What's In Store For The Indian Outsourcing Industry In 2009

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by: maneetpuri
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The Indian outsourcing industry is a world favorite when it comes to high quality services at the most competitive prices. Apart from the cost advantage, Indian service providers place increased importance on the quality of deliverable and ensure that it matches international standards and specific client requirements.

In the recent past however, there has been many instances and situations that has questioned the credibility or if not that at least had severe impact on various realms of the Indian outsourcing industry. It has definitely dwindled but then the industry is not going anywhere. Let us look at some of the incidents and trends and analyze what is in store for the year 2009.

Global Recession

When there is recession, there is cost cutting and when there has to be cost cutting, there has to be outsourcing. Considering this philosophy, the global recession might as well work in favor of the Indian outsourcing industry, even though it may not be a favorable situation overall. In a bid to keep the costs low, companies will outsource work and hire cheaper services. This will drive in more business to India.

However, the U.S. Is increasingly concentrating on creating more jobs on the home turf. This has given rise to the concept of rural outsourcing and near-shoring. But then again, they cannot impede the benefits offered by offshore outsourcing. Moreover, companies who have been at it for quite a while are not very likely to change course.

Satyam Saga

The Satyam incident was a major blow to the whole outsourcing industry of India. And it had definitely made the international cycle question their business relationships with India. However, there are more success stories than incidents like this and that is why the outsourcing industry hasn't been affected more than few hiccups.

High Attrition

Recession has certainly put a break on the high attrition rates felt by the industry and now everyone is just clinging on to dear jobs. However, this will not be a permanent solution to the attrition problem. Once the economy stabilizes, the issues will be all there to handle, though maybe on a lesser scale.

Consolidations and Mergers

Considering the current economic scenario, consolidations and mergers will be on the rise. Companies and organizations will come together, bigger companies will takeover smaller ones and SMEs will be more than ready to comply. All this will be done in a bid to enhance business proceedings and make it easier to survive the harsh economic climate.

Security Threats and Issues

Two of the major threats faced by the outsourcing industry are that of internal security and corporate governance. This is because businesses across the world are re-evaluating their information sharing and management processes. Thus security and governance become extremely important considerations. In future, many regulations and acts thereof can spring up.

Alternatives to Lay-Offs

The direct result of economic recession is lay-offs. However, businesses that can maintain themselves can resist adopting such extreme measures. Other subtle impacts of recession are salary cuts, raised performance bars, no appraisals and etc.

Pressure for Service Providers

All this will lead to increased pressure for the service providers. Because of high competition, outsourcing vendors will have to provide services for lesser prices and also have high accountability for the same.

About the Author

Maneet Puri is a renowned KPO professional and leads LeXolution IT Services, a premier KPO outsourcing company in India. His firm provides KPO services like internet market research and mailing list development.