1. business and industrial
2. business operations
3. management
4. business process

Reviews of Literature
Impact Factor : 1.4716 (UIF)
Volume 2 , Issue 8/ March 2015
ISSN:-2347-2723
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OUTSOURCING AND IMPLICATIONS OUTSOURCING
IN THE INDIAN CONTEXT
Ramakrishna Mohan Rao Munaga
Abstract:
Outsourcing is an effective cost-saving strategy when used properly. It is sometimes
more affordable to purchase a good from companies with comparative advantages than it is to
produce the good internally. BPO industry in India has provided a major boost to the country's
economy. It provides employment to millions of Indians. BPO industry in India is worth $20
billion in 2013. Banking and financial services contribute nearly 40 percent to India's
outsourcing industry.
Keywords: Outsourcing, Implications, Indian, Context.
INTRODUCTION
What is Outsourcing?
Outsourcing is the act of one company contracting with another company to provide services that might
otherwise be performed by in- house employees.
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Outsourcing can replace entire purchasing, information systems, marketing, finance,
and operations department
Applicable to firms throughout the world
Making the right decision may be the difference between success and failure
Procuring from external suppliers service or products that are normally part of an
organization
Off shoring is moving processes to a foreign country but retaining control
Extension of the long-standing practice of subcontracting
Outsourcing has become a major strategy as firms move toward specialization
Increasing expertise
Reduced cost of reliable transportation
Rapid deployment of telecommunications and computers – the Internet
Reviews of Literature • Volume 2 Issue 8 • March 2015
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Reviews of Literature
Impact Factor : 1.4716 (UIF)
Volume 2 , Issue 8/ March 2015
ISSN:-2347-2723
_____________________________________________________________________________________________
Examples
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Call centers for Brazil in Angola
Legal and finance service in the Philippines
IBM providing travel and
payroll for P&G
ADP processing payroll
for thousands of firms
Blue Cross sending
patients to India
Implications of outsourcing in the Indian Context
BPO industry in India has provided a major boost to the country's economy. It provides
employment to millions of Indians. BPO industry in India is worth $20 billion in 2013. Banking
and financial services contribute nearly 40 percent to India's outsourcing industry.
Indian cities, Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune are among the
world’s top 10 outsourcing destinations.
China has been a major competitor for the Indian outsourcing industry. But, India offers a
cost advantage that is not easy to beat. But, rising wage bill of IT professionals and global
financial meltdown is challenging India's position as a preferred destination for outsourcing
business processes.
Nevertheless, the big boom in the BPO industry in India has generated a lot of
employment opportunities with lots of benefits to their employees. Some of which are in the
form of:
 Provident Fund;
 Gratuity;
 Group Mediclaim Insurance Scheme;
 Personal Accident Insurance Scheme;
 Subsidized Food and Transportation;
 Company Leased Accommodation;
 Recreation, Cafeteria, ATM and Concierge facilities;
 Corporate Credit Card;
 Cellular Phone / Laptop;
 Personal Health Care (Regular medical check-ups);
 Educational Benefits;
 Performance based incentives;
 Flexi-time;
 Flexible Salary Benefits;
Reviews of Literature • Volume 2 Issue 8 • March 2015
2
Reviews of Literature
Impact Factor : 1.4716 (UIF)
Volume 2 , Issue 8/ March 2015
ISSN:-2347-2723
_____________________________________________________________________________________________
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Maternity Leave;
Employee Stock Option Plan; etc.
Generally, growth of BPO industry is largely influenced by the existing location factors
of a country. It includes size of workforce, wage differentials, stable and conducive business
environment, telecom infrastructure, trade restrictions and above all the language capabilities.
India can boast of all these attributes barring few deterrents.
References:
Wikipedia
Inidan Express Daily New Paper
Reviews of Literature • Volume 2 Issue 8 • March 2015
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