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Off-shore Development
India most popular offshoring destination, says PwC survey
Our Bureau
New Delhi
,
Sept. 15
INDIA is currently the most popular offshoring destination on parameters such as macroeconomic stability, regulations, labour costs and skills, and would gain more as the scale of outsourcing in the financial services sector is expected to virtually double by 2008, according to a PricewaterhouseCoopers survey.
"Thanks to its combination of an educated, English-speaking population, low costs and highly-skilled workforce, India's BPO market has grown at an annual rate of between 40-50 per cent over the past few years. So far offshoring has been centred round a few key cities in India such as Bangalore, Delhi-NCR, Chennai, Hyderabad and Mumbai. As costs in these places rise, others are likely to come into the frame, maintaining the country's overall competitiveness," the survey titled `Offshoring in the financial services industry: Risks and rewards' said.
Overall the survey found that a quarter of participants currently offshore between 10 per cent and 20 per cent of their headcount. However, in three years, almost half the respondents expect this to be the case. Financial services firms which offshore jobs solely as a cost saving strategy, or do not approach projects with caution would fail to reap the full benefits such as greater operational efficiency and increased shareholder value, it added.
Cost saving was the main reason for offshoring for 79 per cent of the 156 executives surveyed. In the longer term, 74 per cent of financial services firms saved costs by offshoring activities, it added.
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