Macroeconomics Case Study

India as an Outsourcing Destination: Competitive Advantages and Core Competencies

OR

Abstract: Since the late 20th century, Business Process Outsourcing (BPO) to the developing countries by the companies of the developed nations had become more a necessity than an option.Outsourcingwas viewed as an effective business strategy as it offered much more than just cost advantage. By 2003, India had become a major global outsourcing destination because of its high intellectual capital, a huge population of English-speaking graduates, lower compensation costs, strong information technology infrastructure and a sustained government support. In the early 21st century, although India witnessed a rapid growth of BPO companies, it was facing competition from other potential BPO destinations like China, Ireland, Russia and Mexico. To strengthen its competitive edge; and furthermaintain and develop its core competencies, India was required to quickly move up the value chain and provide tailored services suited for different customer needs.

Pedagogical Objectives:

• To analyse the concept of outsourcing and its importance
• To discuss about the concept of Business Process Outsourcing (BPO)
• To know how an organisation should decide the location for outsourcing its activities
• To discuss about the future of outsourcing in India.

Keywords : Business process outsourcing (BPO); India; NASSCOM; Bangalore; Indian BPO market; BPO evolution; GE Capital International Services (GECIS); Captive outsourcing; Strategic alliance; Outsource model; ITES-BPO; Videsh Sanchar Nigam Limited (VSNL); Internation