Indian Outsourcing Industry – Overcoming The Challenges!

India has long been a favorite outsourcing destination for businesses across the world because of its high quality of services and cost competitive prices. However, with the unfavorable economic climate and recent incidents of account frauds and security threats, there have been hiccups in the otherwise seamless industry. And because of these very incidents the Indian outsourcing industry has been shaken.

And at this day, it is facing a good amount of challenges as well. Let us look at some of the potential challenges faced by the industry and how it is overcoming the same.

Cheaper Services offered by countries like China and Russia

With the boom in the outsourcing industry, many new service providers have mushroomed in countries like China and Russia that claim offer cheaper services. However, these vendors are relatively new in the market and thus lack the experience and expertise that is needed to process outsourcing tasks efficiently.

Outsourcing only for cost reduction is the biggest mistake businesses can ever make. Rather, outsourcing decisions should be made based on a combination of factors like cost, expertise, industry experience, quality of services, responsiveness and flexibility of the service provider. Apart from reducing the cost investments, the outsourcing deal should also seek to enhance the quality of the business processes that are outsourced. Moreover, these countries have issues like language problems, cultural differences, geopolitical instability, and the risk of stolen intellectual property.

Security Risks perceived by Clients

The recent incident of accounting fraud at Satyam has questioned the credibility of outsourcing firms and their proceedings. Satyam was a premier brand name in the IT outsourcing industry and fraudulent dealings had taken everyone by surprise. On top of it, there have also been couple of cases of credit card frauds in the past. All this news has managed to scare off outsourcing clients and made them extra cautious about investing money.

However, outsourcing service providers have adopted strict privacy policies and security measures that ensure total protection of data. The office premises have secure environments and employees are briefed about the security policies as well. This makes sure that client data is not misused.

Geographical and Time line Differences

Since India falls in a different time zone, many western countries often find it difficult to coordinate. For example, their business day begins when the day ends in India. Thus there is very less time that is actively common and all the live business communication. However, this might as well work in favor of business proceedings. Because India has an advantage of earlier time, the business day starts earlier here than it does in western countries. So, any work that is outsourced on a day can be completed and reverted back before the start of the day there.

Intellectual Property Issues

One of the major threats to outsourcing to offshore continents is intellectual property thefts. It is important that companies adopt strict protection measures to ensure against the same. Outsourcing vendors often disable the USB drives on the computer systems in order to prevent employees from taking data outside the office premises etc.

Maneet Puri is the director of LeXolution IT Services, a leading IT outsourcing company in India. His company offers a range of web solutions and Knowledge Process Outsourcing services including contact database building and mailing list development.