Outsourcing is one of the fastest growing industry on the
world platform. It mainly involves transfer of components or large segments
of the companies' internal production processes, businesses, infrastructure,
etc. to the external service providers. It can cover a wide range of components
depending upon the core competency and the requirements of the outsourcer.
It may be broadly classified into information technology (IT), human resource,
customer service, engineering, knowledge services, legal, R&D outsourcing,
etc.
Owing to its advantageous factors like presence of one of
the world-best intellectual and internet resources, lower cost structure,
multi-lingual capabilities, etc., India has emerged as the 21st century's
software powerhouse, offering many advantages as a global sourcing hub,
especially for IT enabled Services (ITES) and Business Process Outsourcing
(BPO). The main motive behind outsourcing has been that it allows a company
to invest more time, money and human resources in core active items without
losing quality and name. Call centres have also mushroomed in India serving
various foreign airlines and banks.
Further, economic success of the BPO industry has taken
many firms to their advanced knowledge work to off shore destinations.
Knowledge Processing Outsourcing (KPO) is one step extension of BPO and
can be defined as high added value processes chain where the achievement
of objectives is highly dependent on the skills, domain knowledge and
experience of the people carrying out the activity. The KPO typically
involves a component of BPO, Research Process Outsourcing (RPO) and Analysis
Proves Outsourcing (APO). United States (US) and United Kingdom (UK) are
the key markets for Indian IT-KPO exports.
As a result, India continues to dominate global outsourcing
market with market size estimated to be worth about $52 billion. Banking
and financial services contribute nearly 40 percent to India's outsourcing
industry. But, outsourcing industry has been facing many challenges, like,
cut-throat competition, severe shortages of trained and skilled manpower,
more investment needed in KPO infrastructure, need of higher level of
control, maintenance of higher quality standards, etc. Besides, there
are several problems faced by BPO employees which affects their health
and lifestyle, namely, working in night shifts, problem of sexual harassment
at workplace, etc. In case of offshore outsourcing, cultural mismatch
or language barriers can pose a big risk.
At the Central level, the Department of Information Technology,
under the Ministry of Communications and Information Technology, is the
main authority responsible for the overall development of outsourcing
in India. Accordingly, separate Departments of Information Technology
have been set up in the States/ Union Territories. Both Central and State
Governments as well as private sector/ MNCs have been making continuous
efforts to develop this industry on a sustainable basis. But, they still
need to develop the adequate talent base, provide technical knowledge
and design appropriate training programmes for BPO employees, incorporate
proper health care policies as well as implement safety measures, especially
for women.
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