outsourcing work to India

America's loss is India's gain, when it comes to two types of commonly outsourced jobs - programmers and call center employees. The latter is familiar to most of us who have had to call in to our credit card company customer service, software support centers, or catalog ordering numbers. It seems most of these jobs have been outsourced to Indian firms. Although the language barrier can sometimes pose minor difficulties, there really is no reason anymore why people all across the globe can't service the customers of any nation. Technology makes it all possible today.

Computer programming is another profession that is heavily outsourced to Indian firms. India has worked in computer programming. Many of the United States' largest companies outsource their programming jobs to Indian firms with great success. This takes several forms. Sometimes the U.S. Company plans and administers the project closely. Other times the Indian firm takes on all the planning and project management duties as well as the programming.

One advantage is overall project speed. This is because the planning, review, system testing can be done here, corrections requested and sent to India, who programs them "overnight" and we have the changes first thing in the morning in the United States. The most important reason all outsourcing is done by American companies is simply cost. Indian workers make far less than Americans. Programmers here can start out of college making over $50,000 annually. An experienced programmer in India will make the equivalent of about $10,000 annually. The cost difference is less spectacular in the call center workers, but it's still substantial. Since business is driven by the bottom line, many inconveniences are tolerated to gain this distinct financial advantage.

Indian outsourcing is the best way to cut application development and maintenance costs, deal effectively with the problems of software demands, and focus on more strategic work. It is estimated that around two-thirds of all Fortune 500 companies are outsourcing work to India. Besides, successful outsourcing to India is still difficult. Even though the market is matured, telecommunications have improved and English fluency in India has flourished, challenges still remain. There are cultural issues, high service level expectations, more transitional costs, and expensive ongoing management relationship. There are many concerns related to outsourcing from Indian perspectives. Some of them are given below.

Even with India's experience and edge in software development, there is a very little attention being paid to the value of Intellectual Property. Also patenting is a powerful weapon to retain edge in a competitive marketplace. But Indian companies are blinded by their focus on growth, and unable to see the implications of not owning IP around their service business.

Most of the Indian Companies are focused on the low end of the BPO and IT enabled business and these companies are in danger of being affected because of the sheer monotony of the job and tweaking with the normal biological clock. There are lots of health issues and boredom because of the tampering with the biological clock of the employees. 

The strong Indian currency and increasing compensation demands by workers in India accounts for part of the change, but so do the language requirements of the market served by global outsourcing companies. The better known alternatives to India include facilities in China and Mexico, and other Latin American countries and Eastern Europe are also popular. But perhaps most surprising is the fact that United States is also considered. Japanese auto makers invested and created jobs in less developed parts of the United States decades ago.

Programmers are outsourcing their software modules to cheap and efficient labour in India. This way they get the best of both worlds- more money and more time. They earn doubly - one from the outsourced job, other from the new job they undertake.

Smarter techies are working for three to four companies at the same time, outsourcing all the coding and just supervising them for few hours a day. This way they are able to earn four to five time more than what they used to. This is called the principle of 'comparative advantage', whereby you concentrate on you core strengths outsourcing the non competitive areas. The wisdom of outsourcing applies to businesses great and small. When companies have some of their operations performed elsewhere, they reduce costs and allocate capital and labour instead to those activities that cannot, or should not, are subcontracted. When businesses use capital and labor efficiently, they can better explore expanding markets. And faster growth creates a need for new workers. The result is almost always a net gain in employment.

Outsource to India is change. As ever, change will be unacceptable to a few; there will be "dislocations," to use the jargon of labor economists. Some people will be too old, too inflexible, or otherwise unable to find new work. The idea has given rise to firms named as micro multinationals. These firms hire a small number of sales and marketing people in the US. The software products are developed in Bangalore, Pune or Hyderabad. But most Americans can relax. Cheap overseas labor means more jobs in the US, not fewer. And working for a company that's both global and small might just be the best of both worlds. Over the past 10 years, 325 million jobs were eliminated in the US, but 342 million jobs were created. According to the Information Technology Association of America, some 372,000 technologists were laid off in the recent recession. Some fraction of those positions moved to India.