outsourcing to India
Filed in archive Global Economy on July 12, 2003
Oracle has caught some attention with the announcement to expand operations in India. Oracle will mainly staff the Hyderabad facilities and plans to employ 6.000 software workers in India. Oracle's decision testifies India's rank as a place for software companies. Microsoft and SAP have made the step long time back. But a lot of smaller companies have been venturing into India only in the last years. I have been operating an outsourcing development center near New Delhi in 2000/2001. Indeed the risk and possible returns are enormous.
On the pro side:
- low salary level
- abundance of HR
- very motivated individuals
On the con side, there are some issues to overcome:
- infrastructure issues
- environmental situation
- defect rates in your software
In conclusion it's challenging to make things work in India. But once you are there and operating the economies of scale can be interesting. So it can be a good move to outsource simpler programming and testing as well as back office work.
There is much more information about outsourcing in this weblog:
- outsourcing to India - deeper analysis
- outsourcing to India becomes fancy ...
- TIME on outsourcing to India
- outsourcing to India
- outsourcing a comprehensive analysis by Knowledge@Wharton
For more info about outsourcing see our new Outsourcing Weblog
Permalink: outsourcing to India
Tags: outsourcing india entrepreneurship 2003 technology outsourcing+india venture+capital samwer+brothers
Vote for outsourcing to India:
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Response from:
Mario
(07/12/03 7:52am)
Response from:
TJ
(07/12/03 11:02am)
Yep, interesting story about Dell. GE had around 3000 people across the road in south Delhi. The used to 'train' people with US comedy and lifestyle shows in order to depress the accent. As far as my 'studies' have shown it was really making progress. :-)
Response from:
Mr. S
(08/08/03 12:10am)
I worked at a call center contracted to Dell in probably one of the cheapest parts of the US. Still they outsourced to India in a year and dropped the account. Some of the experiences were rather poor from what I've heard. Stuff like useless info, lying about technicians coming out, misleading warranties...etc. It just seemed almost as if in India they had no accountability. By the end the average consumer was thanking us in advance just for speaking English.
Response from:
TJ
(08/08/03 4:22pm)
Thanks for the inside. Quality management is still a huge issue. The whole term of quality management gets a new meaning once you start services there. You really have to train and train and implement perfect processes to reach just sufficient output, something unknown in Europe or US. So far, you’re totally right, but on the other hand after 12 months or so of headache agents down there can really save a fortune for a company.
Response from:
Kevin
(12/18/03 7:35am)
The process of outsourcing to India seems to boil all IT possibilities as one. The outsourcing of call-center operations where people speak to people vs. software maintenance vs. software development vs. operational management are all very different. This blog could help to distinguish the differences either by spawning the discussion or at the very least making certain that generalities don't confuse the unique aspects of each variant process above.
Call centers can be a front-end to the software maintenance but are more often operated to facilitate 7x24 operational availability for an organization - making it appear that someone is working all day and night. These professionals must learn the company, product(s), processes, and customer-orientation policies to be effective in their roles as customer support representatives.
The software maintenance business outsourced to India can and does afford software companies and many industries the opportunity to reduce total cost of ownership (TCO) as it relates to the long-term management and enhancment of fully developed operational software. Remembering that software is characterized as mission/operational critical, operational, decisional, informational, etc.. also is considered in what is outsourced and what might be retained locally by a firm. Mission or operational critical software can be administered off-shore but the on-shore dynamic is often just as critical since operationalizing the correction may mean local changes which can't be affected by off-shore resources. Maintenance of software company assets (source) is driving by prioritization from a product management organization that sifts the open defects and aligns corrective action with the next calendar delivery of corrections - whether in a patch, hot-fix, or service pack. In all cases, the leverage here again is cost and the potential for huge savings.
Software development that is outsourced off-shore requires again recognition that only some of the product life cycle can be affected out-of-country while some must be done locally. Customer facing processes must still be intact to afford the solution manager/creator the ability to adequately discuss the solution, manage expectations, and change off-shore expectations if needed.
In all of these DIFFERENT opportunities, the need for process management disciplines reigns supreme and if you have experience in any of the three or four areas mentioned in this post - you'll agree that the disciplines for managing what can be done off-shore must begin with the basics. Carving out processes or sub-processes in these areas requires understanding of entry/exit criteria, communications plans, acceptance standards, training standards, and a relentless commitment to continuous improvement - eg. process management or as it's inferred quality management.
Hoping this post begins to spawn the varying discussions of what, how to, and why to outsource off-shore vs. boiling it as a single topic. Thanks - Kevin
The process of outsourcing to India seems to boil all IT possibilities as one. The outsourcing of call-center operations where people speak to people vs. software maintenance vs. software development vs. operational management are all very different. This blog could help to distinguish the differences either by spawning the discussion or at the very least making certain that generalities don't confuse the unique aspects of each variant process above.
Call centers can be a front-end to the software maintenance but are more often operated to facilitate 7x24 operational availability for an organization - making it appear that someone is working all day and night. These professionals must learn the company, product(s), processes, and customer-orientation policies to be effective in their roles as customer support representatives.
The software maintenance business outsourced to India can and does afford software companies and many industries the opportunity to reduce total cost of ownership (TCO) as it relates to the long-term management and enhancment of fully developed operational software. Remembering that software is characterized as mission/operational critical, operational, decisional, informational, etc.. also is considered in what is outsourced and what might be retained locally by a firm. Mission or operational critical software can be administered off-shore but the on-shore dynamic is often just as critical since operationalizing the correction may mean local changes which can't be affected by off-shore resources. Maintenance of software company assets (source) is driving by prioritization from a product management organization that sifts the open defects and aligns corrective action with the next calendar delivery of corrections - whether in a patch, hot-fix, or service pack. In all cases, the leverage here again is cost and the potential for huge savings.
Software development that is outsourced off-shore requires again recognition that only some of the product life cycle can be affected out-of-country while some must be done locally. Customer facing processes must still be intact to afford the solution manager/creator the ability to adequately discuss the solution, manage expectations, and change off-shore expectations if needed.
In all of these DIFFERENT opportunities, the need for process management disciplines reigns supreme and if you have experience in any of the three or four areas mentioned in this post - you'll agree that the disciplines for managing what can be done off-shore must begin with the basics. Carving out processes or sub-processes in these areas requires understanding of entry/exit criteria, communications plans, acceptance standards, training standards, and a relentless commitment to continuous improvement - eg. process management or as it's inferred quality management.
Hoping this post begins to spawn the varying discussions of what, how to, and why to outsource off-shore vs. boiling it as a single topic. Thanks - Kevin
Response from:
Knowledge Working
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TJ’s Weblog has article on the pros and cons of outsourcing to India. Also included in the article are pointers to several other articles on the same topic....

http://www.gripe2ed.com/scoop/comments/2003/6/12/10720/0194/0/post">ht
tp://www.gripe2ed.com/scoop/comments/2003/6/12/10720/0194/0/post
/> , which can be summed up by "...used to be such a fan of Dell, but this experience has made me really upset with their support and customer service".