Outsourcing to India
of outsourcing: Outsourcing to India is being considered by several overseas
corporations recently. Here we discuss some advantages as well as
some disadvantages of
outsourcing to India.
The products and services are usually significantly cheaper in India compared to US or
the man power in India is definitely cheap compared to US or any other developed
nations, manufacturing or service costs are not
necessarily so cheap.
company typically spends on a skilled employee (with at least 2 years of
relevant job experience) about US $400 -$1000 per month depending on
the skill level . This is definitely cheaper compared to same level employee
in a developed country by at least a factor of 2-4. On the other hand, the
infrastructure and fuel expenses are relatively more in India. Various costs are
typically as below:
Gas (Petrol as it is called in India): A gallon of gas (Petrol)
which is equivalent to 3.785 liters costs about US$ 3.5 in India. This is
quite high when compared to US. Similarly, Telecom charges are still
high compared to US. A long distance call (>300 miles) costs about
10 cents per minute or even more for longer distance.
Internet Access: The Internet access charges, though became very
competitive, still no where near US. A dial-up Internet still costs about
75 cents per hour or about US$ 5 per 10 hours. DSL (Broadband) access costs
about Rs.1000 (~$25 per GB of traffic!) per GB of traffic. (Rs. 45= 1
Other infrastructure facility expenses such as electricity, and water are
also relatively higher. Power failures occur frequently in India and
therefore, it is essential to use backup generator.
of work from long-distance: It depends on the communication and transportation facilities
available with the outsourced company. Typically the following facilities
are available in several big cities (Known as Class A cities) in India:
Telephone (Both land and mobile), Fax
Internet (Both dial-up, and Broadband) access
Road, Rail, Air
the minimum, ensure that the company has appropriate telephone and
Internet access facilities.
skills: Ensure that
the company has appropriate infrastructure facilities such as office,
machines, skilled manpower, and communication&transportation
facilities. One important thing to keep in mind while issuing a contract to
an overseas company is to be clear about the deliverables. If it involves
a large contract, it may be worthwhile to issue a trial order and
verify whether the performance is acceptable.
of outsourcing to India:
2. Cheaper office space (One square foot costs less than $1 per month).
3. Highly skilled work force (For example, Bangalore is said to have more
number of IT engineers than Silicon valley).
Higher fuel, and electricity costs
2. Higher telecom and Internet access charges
3. Public infrastructure not up to the mark when compared to developed
nations, and the companies need to make their own arrangements (such as
back-up power generator etc.)
job is man-power intensive, and require skilled work such as software
is no requirement for a permanent position.
company wants to cut down the costs of development, and the business
environment is very competitive.
schedules are tight, and require immediate results.
fits into the business model of your company.
The above are the opinions of the author and anandsoft.com assumes
no responsibility for the accuracy or correctness of the above. Any
comments may please be forwarded to info(at)anandsoft.com.
you require full time workers for any project, or want to maximize the
value of your staffing budget, anandsoft.com can arrange for dedicated
staff, supervised on our premises, who will work in accordance with your
requirements for website design, coding, or other packaged software
development. Please contact sales[at]anandsoft.com