India's outsourcing industry

NASSCOM the India's Information technology (IT) group wants to change the term “Business Process Outsourcing” (BPO) to “Business Process Management (BPM). NASSCOM President announced that from now on, India will NOT use the word “Outsourcing” in their contract but will replace it with the word “Management” which is more appropriate with the current business.

An executive further explained: “Outsourcing” is no longer a good word. It usually means “Cheap” or “Low cost” but today we are no longer cheap or low cost. India IT industry is making over one hundred billion dollars in business per year now and still growing every year. India is the destination of most software development in the world and we have gone from testing and coding to managing the entire software development for customers. We provide high value to customers as we understand their business better, and we want to be a partner, not supplier.”

India's IT industry is moving from support to develop solutions with their in-depth capabilities through service delivery excellence. Despite the current global recession, India's economy is still doing quite well because its strengths is based on the knowledge of its workers. Twenty years ago, it started with the Y2K supports and call center business but overtime it has evolved into a knowledge industry that can do complex works due to its highly skilled workers. Today, most of the testing and coding are outsourced to other lower cost countries and most works in India are focusing on total solution and research.

However, a Wall Street analyst disagreed: “As the U.S begins to “Insource” to solve the unemployment problem, any company that “outsource” will be looked at carefully by the public as shifting job away and not helping the economy. To avoid it, people just come up with new term to avoid public scrutiny. A change in terminology would not change anything as thing will remain the same.”


  • Blogs of Prof. John Vu, Carnegie Mellon University


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