Globalization and Telecommunications Contribute to India’s Growth in Outsourcing

Internet and Mobile Telephony Make Offshoring in India Profitable

Outsourcing in India is a massive industry. Outsourcing in India has been fuelled by globalization and the rapid advances made in telecommunications. Outsourcing in India, as a money-spinning, employment-generating behemoth, can lay the causative reasons behind this success to these two factors.

The commercial and business boom of outsourcing in India, as a corollary, has spawned an industrial landscape dotted with outsourcing vendors. When the world speaks of outsourcing in India, it basically refers to the many BPO and KPO companies operating out of India.

What all these companies have in common are the various positive consequences of free trade and convenient communication. Outsourcing in India has greatly benefited from these two factors.

The importance of these two factors is not they themselves, per se, but the way in which they made outsourcing in India and other nations cheap, effective, of strategic importance, and irreversible.

To see how this transpired, it is worthwhile to delve into globalization and the telecom revolution in a bit more detail. The process of globalization that started in 1980s, significantly brought down the cost of communication, transportation and eventually the production. As a result, the inter country competition witnessed an upward trend. This process of globalization was also instrumental in breaking down barriers of trade and culture between nations.

Outsourcing in India benefited from globalization as it broke down trade and cultural barriers among countries.

The latter factor is underestimated by experts when they analyze and discuss outsourcing in India. The expansion of physical borders reduced the various psychological barriers in the minds of Western companies.

As the first American companies began outsourcing in India, the ‘trust deficit’ due to various biased perceptions began reducing, making outsourcing in India and other countries such as Mexico, Poland, China, the Philippines, Thailand, and South Africa, not "beyond imagination".

Outsourcing in India increased in volume due to easy deployment of capital and labor, and its exit. In these ways, globalization made outsourcing in India an attractive long-term business proposition.

The other factor that made outsourcing in India profitable was the revolution in telecommunications.

Think about it: without the Internet and mobile telephony, outsourcing in India, let alone in any other country, is unthinkable. What these two technologies did was to make distance immaterial to many of today's business processes.

For instance, the process of financial accounting, legal research, engineering design, don't need to depend on proximity. Outsourcing in India and other countries, and the various vendors operating in them, has made these processes geography-independent, though many companies still reserve the decision to near shore, offshore, or outsource.

The availability of fast broadband Internet connectivity; voice and video over telephone; and cheaper landline and mobile telephony means that a company can review work as many times in a day as possible while outsourcing in India.

With data transfer and communication time immensely shortened, work matters can be discussed face to face while outsourcing in India - cutting out all need for expensive national and international travel.

Once business relationships are established after initial face to face meetings, modern telecommunications take over in the form of email, chat, and phones - which, today, are sufficient to keep any kind of project going.

The combination of globalization's localization and economies of scale abilities, and the awesome communication power of ever-improving telecommunications, has created a "business wave of opportunity" in outsourcing in India.