About
IT outsourcing is using outside vendors to create, maintain, or reengineer IT architectures and systems.
Menu
- The benefits of IT outsourcing services
- How can IT outsourcing improve your business
- IT Outsourcing: Top 10 tips you should be aware of
- The Human Element Of IT Outsourcing
- Strategic Intent for IT Outsourcing
- Outsourcing IT - Is it the Best Option for your Organization?
- Outsource or do the job yourself?
- Offshore IT Outsourcing
- IT Services Outsourcing When You Don't Know Everything
- IT Security Functions aboard the Outsourcing Bandwagon
- IT outsourcing to India saves 60% costs
- IT outsourcing benefits US economy
- IT Outsourcing: Maturity Phase
- Healthcare IT Outsourcing - India Gears up to the Challenge
- Cost Effectiveness of IT Outsourcing
See Also
IT outsourcing to India saves 60% costs
According to National Association of Software and Service Companies, the organizations IT outsourcing back-office work to India save up to 60 per cent of their IT budget.
The spread between salaries in India and, say the US or UK is more than 70-80 per cent for offshore processes. But conducting business overseas and distant interaction costs increase by 10-20 per cent, thus it results in net savings of 40-60 per cent for processes outsourced offshore. Such cost efficiency and low manpower costs are the most important India’s advantage, and they will remain crucial reasons for the next 20 to 30 years.
The scope of savings directly depends on the amount of work transferred to India, for instance, insurance and banking constitute the best part of savings due to high proportion of processes which can be delegated offshore. Not to twaddle we will make some examples and figures: during the last four years the US banking and financial services sector made savings to circa $ 8 billion by IT outsourcing to India. No wonder, the salary of an operator in Indian call center is approximately 15 per cent lower than a US call center agent.
Conceding even the most extreme scenario, when salaries grow at an average 9 per cent, India is still competing with its 70 per cent advantage in 2008. To be more true to life, provided salaries grow at 3 per cent, Indian call center agents will be 80 per cent cheaper compared to their US counterparts in 2008. Moreover, Indian call centers hire more skilled and talented people. To continue the line of advantages Indian call centers are more productive than operators in the US or UK: 98 correct transactions compared to 95 by an agent in the UK, and 120 transactions an hour by Indian operator, while only 100 calls by UK agent.
Even the the factor of reply speed differs: it takes 8 seconds an Indian agent to reply the call, compared to 20 seconds for a US operator.