Why World Governments Send Jobs to Indian Companies
It’s not just private organizations that send jobs to India; a large number of government and semi-government departments of world governments also ship jobs to India. Of course, governments in the U.S. and the U.K. don’t send work related to military technology and other such sensitive jobs, but they do send to India simple back-office work and IT projects, such as data management, research, software packages, and administration.
However many banks, airlines, and research organizations, while strictly not government, have chosen to send projects of varying kinds to India.
The latest endorsement from a world government to offshore to India comes from a former British Office of Government Commerce official Sir Peter Gershon, who has advised the Conservatives, who are campaigning against the ruling Labor government, to outsource all back-office processing functions within 18 months of being elected.
As many British companies and government departments already do, this could result in more government departments to ship jobs to India.
Gershon told the British media that in 2009, the Labor government’s latest efficiency review had identified £18bn of spending on the back office and showed case studies where the private sector saved 35 percent to 70 percent only because it outsourced.
Such a huge margin of cost saving is likely to encourage more world governments, as it has the British government, to send their projects to India.
In the recent discourse on offshoring to India on the world stage, one can point to the legislation in the U.S. government’s healthcare system by U.S. President Barack Obama. Reforms in U.S. healthcare, worth $2.5 trillion dollars, has generated demand for various kinds of jobs, many of which the American government and private companies will ship to India.
Indian vendors have already started to prepare themselves for the onslaught of government jobs that American healthcare organizations will send to India. America’s private healthcare organizations and medical insurance companies will also ship medical billing, medical transcription, insurance, and other administrative tasks to India.
Management consultant McKinsey estimates that an overall amount of an astonishing $175 billion will be spent on growing Electronic Health Records between 2010 and 2020. About $50 billion will be assigned to IT services and training. U.S. companies dealing with this segment are likely to send a substantial chunk of this work to India.
U.S. government and private hospitals will send system set-up, installation, beta-testing, and conversion of archival data into compatible formats to India.
Then there’s the rapidly growing world green economy with its own set of demand for products and services that many governments and private players will ship to India.
Green investments are already showing results. According to the U.S. outsourcing research company Brown-Wilson Group’s 2009 Green Outsourcing Report, since the beginning of 2009, American government and semi-government and private players have chosen to send a whopping 22,000 green technology jobs to India.
This is a figure that’s only going to climb in the years to come, given the worldwide concerns about climate change.
Undeniably, world governments like to ship jobs to India due to the unbeatable combination of skill, low cost, talent, and stable government. These factors act as strategic collaterals for world governments, and as “trust” factors.
A reason not often discussed while talking about why government departments often send work to India is the political and strategic perception of India as a country that does not pose threats based on overt and covert agendas. To give an example, a government department, anywhere in the world, will think twice before outsourcing basis data processing on technology research to China due to obvious strategic implications.
Taking all these factors into account, it can be concluded that India has everything that could make job shipping a grand success—more than any other outsourcing destination.
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