2. India

3. India
The Economic Effects of Outsourcing

4. Outsourcing Around the World
• Contracting with another
company/person to do
particular function
• Almost every organization
outsources
• Function being
outsourced = non-core to
business
• Outside firms providing
!
This informa,on came from The
outsourcing services Outsourcing Ins,tute, a company
service providers that helps other companies find
outsourcing op,ons.

5. Outsourcing Around the World
• Crucial aspects of business
should probably not outsource
• Cash-flow management and
customer interaction
• Biggest benefit: saves you money
• Depends company size and
what is outsourced
• Disadvantage: Putting part of
company in someone else's
hands
• Trust, ability to adapt are key

6. Outsourcing Around the World
• Smart outsourcing can juice
performance of established
players
• Firms are learning to
capitalize on global talent
pools to rush products to
market sooner at lower costs
• Aggressive outsourcers using
low-cost, efficient business
models to challenge
incumbents
• With low-cost engineers,
financial analysts, consumer
marketers, architects now
readily available via Web,
CEOs see quicker benefit

7. British Occupation
• 1773, India = semiofficial agency of
Britain
• Britain slowly overtook the entire
subcontinent
• East India Company given complete
control
• Britain caused quick modernization
• Telegraphs, railroads, roads, and
postal services
• India natives fear modernization
• Sepoy Rebellion causing British
crown to take control

8. British Occupation
• Many rebellious groups
formed
• Indian National Congress
main rebellion group
• England tries to reform to
counteract the rebellions
• Gandhi starts silent
rebellion
• August 15, 1947: Indian
Independence

9. Beginnings of Outsourcing
•
Companies realized
that India had highly
trained workers, low cost
structure, English language
skills
•
Two things happening making
outsourcing to India optimal:
1) Indian government policy
became friendlier to
entrepreneurial companies
2) Satellite and fiber optic
communication improved
dramatically between
English speaking countries
and India

10. Outsourcing in India
• India = vital destination for
outsourcing
• Rapidly growing industry
• Grew at the rate 38% in
2005
!
Indian workers for the Canadian
company Bombadier

11. Outsourcing in India
• 75% of US and European
multinational companies
use outsourcing to
support financial functions
• 71% of European
compaines and 78% of
U.S. companies plan to
keep services within next
12-24 months
• 29% of US and European
companies expect to
increase use of
outsourcing of financial
functions

12. Assignments Outsourced to India
• Business Process Re-
engineering
• E-Commerce
• System Migration
• Maintaining Legacy
Systems
• System Integration
• Telemarketing

13. Familiar Companies
• Oracle
• CITIBANK
• Hewlett Packard
• JP Morgan
• Schlumberger
• GE Capital
• ATT Wireless
• Dell Computer Support
• Texas Electronics
• Mastek Limited
• TransUnion
• Orcim Soft, Inc.
• Rand McNally

14. Outsourcing
Main advantages of India
as an outsourcing
destination:
• Flexibility
• Technological competence
• Quality output
• Cost control facilities
• Time-to-market

15. Positive Impacts of Outsourcing in India
• Approximately 230,000 new jobs are created
each year
• Integration of people
• Highly skilled people outsource in poorest
areas
• Outsourcing brings investment and support to
poor areas
• Improves economy
• Build jobs and maintenance of infrastructure
• Opportunities and recognition from
multinational corporations.

16. Negative Impacts of Outsourcing in India
• Exploit the poor
• Significantly underpay workers
• Forced into culture
• Must adapt American names
and take Americanizing
classes
• Disregard for Indian holidays

17. Positive Impacts on Other Nations
• Beneficial to some nations,
especially if developing and
do not possess ability to
produce own goods
• Outsourcing allows access
to low price products, such
as former Soviet states
• States also attempting to
get into the outsourcing
market

18. Negative Impacts on Other Nations
• Outsourcing can hurt nations that
have been historically manufacturers
• Germany and production of
chemicals
• Industrial Revolution
• Germany became Europe’s
leading producer of
commercial chemicals
• Wages increase and
regulations become stricter,
German companies began to
take jobs elsewhere
• Putting many people out of
work

19. Positive Impacts on USA
• Allows customers to
purchase goods for less,
• Allows stores (Wal-
Mart) to sell massive
amounts of goods
produced outside of
United States
• Allows common consumer
to purchase more goods
on same amount of
income, increasing the
happiness of average
American consumer

20. Negative Impacts on USA
• Outsourcing takes away
manufacturing jobs in U.S.
• Leads to increased competition
for remaining jobs left,
• People without education have
difficulty finding job
• To compete with outsourced
jobs, domestic companies must
cut wages or other benefits to
keep costs low
• Must be more efficient than
counterparts

21. Social Reactions in USA
• Strong public opinion
against outsourcing
• Supporters draw on
mainstream economies to
argue that outsourcing
should bring down prices,
providing greater economic
benefit to all

22. http://www.hulu.com/watch/194372/
outsourced-whats-thanksgiving#s-p5-sr-i1

23. Works Cited
• "Outsourcing - What is Outsourcing?." SOURCINGmag.com. CTQ Media, 2011. Web. 29 June 2011.
• Engardio, Pete, Michael Arndt, and Dean Foust. "The Future of Outsourcing." BusinessWeek.com. Bloomberg
L.P., 30 Jan. 2006. Web. 29 June 2011.
• Lowe, Keith. "The Pros and Cons of Outsourcing." Entrepreneur. Entrepreneur Media, Inc., 4 Mar. 2002. Web.
29 June 2011.
• http://business.mapsofindia.com/india-company/outsourcing.html
• http://en.wikipedia.org/wiki/Business_process_outsourcing_in_India
• "The Outsourcing Institute." The Outsourcing Institute - THE Professional Resource for the Outsourcing
Industry. Web. 29 June 2011. <http://www.outsourcing.com/content.asp?page=01b/other/oe/q405/
moneymatters.html>.
• Ram, By Sudhakar. "India's Next Outsourcing Wave - BusinessWeek." Businessweek - Business News, Stock
Market & Financial Advice. Web. 29 June 2011. <http://www.businessweek.com/globalbiz/content/mar2010/
gb2010039_433787.htm>.
• "TIME Magazine Cover: India Inc. - June 26, 2006 - India - Globalization - Telecommunications -
Business." Breaking News, Analysis, Politics, Blogs, News Photos,Video, Tech Reviews - TIME.com. Web. 29 June
2011. <http://www.time.com/time/covers/0,16641,20060626,00.html>.
• "Union to Protest Mexico Outsourcing Conference « Machinists News." Machinists News. Web. 29 June
2011. <http://iam751.wordpress.com/2010/11/15/union-to-protest-mexico-outsourcing-conference/>.
• http://www.virtualemployees.com/history_of_outsourcing_to_India.php
•