Thursday, January 30, 2020
Positive Impact of Outsourcing in India Essay Example for Free
Positive Impact of Outsourcing in India Essay Outsourcing or Business Process Outsourcing (BPO) to countries belonging to the developing classification is the present trend. The establishment of outsourcing as an essential component in the world economy is a result of explosive growth of internet, development of the information society, and globalization. The outsourcing of Information Technology (IT) emerged during the time of the start of every corner of the world being brought together by the internet and the national barriers of countries all over the globe were brought down by globalization(Ghimire, 2005).            In information technology industry, outsourcing to developing countries is the latest strategy of companies from developed countries mainly as a cost-cutting mechanism. Outsourcing now is not merely other firms handling operations and services of other companies but rather it has crossed the national borders. Parts of the IT aspects or the whole business functions are now executed and managed by different companies in developing countries like India, Brazil, China, Israel, and Philippines. These developing countries have companies which cater to the needs of big companies in developed countries. Outsourcing to other countries is thus the provision of services like those associated with information technology by companies of developing countries to sustain the needs of the companies which are in developed countries. The primary driving force of big companies in developing countries employing outsourcing in developing countries are: higher efficiency, better quality of services, and cheaper labor cost(Nag, 2004).            The growth of the information technology sector of India has been unparalleled since the liberation of the Indian Telecom sector in 1994. The progression of India as a global outsourcing provider is continuous since then. Today, this country is the primary outsourcing provider in the world, holding the 44% of global outsourcing market in back-office services and software. At the end of 2005 the revenues generated by the outsourcing in this country is 17.2 US dollars; and hired direct employment of 1.05 million people and hired indirect employees which sums up to 2.5 people. These indirectly hired employees are associated with the catering and transport business(Pradhan, 2005).            Positive and negative impacts to the people of India especially on the workers of the outsourcing provider companies are brought about by this new trend. The most significant impact of outsourcing in developing countries like India is on its economy and its employment rate. Numerous numbers of individuals are given the opportunity to work for a living through the outsourcing processes. The outsourcing of the information technology (IT) to India increased the employment rate with 100,000 people being hired annually. Though the salary of those people working in an outsourcing provider from a developing country is lower than those of their developed country counterparts, these salaries are already slightly higher in relation to the rates in their developing country(Nag, 2004).            The development of new infrastructures in developing countries like India is another affirmative impact of the business operations outsourcing. Aside from this, outsourcing also brought about the transmittance of ideas and technology to developing countries regarding various aspects of the business industry like manufacturing and agriculture. Guidance in communications from business-to-business and e-commerce applications; information provision regarding marketing and prices; and conveyance of knowledge on services processing operations are among the specific benefits acquired by developing countries through outsourcing(Nag, 2004).            The primary component of India’s outsourcing industry is the call centers which are providers of information and telecommunication technology-based off shoring services. The progression of the call center industry in India brought about changes in the culture and society of this nation. India which is a patriarchal society is now faced with the issue of social, cultural, and economic women empowerment because the call center industry prefers to hire women. These women call center agents acquired financial independence hence their outlook, career choice, and attitude changed from being subordinates of the patriarchal society into women capable of being independent and asserting themselves in their society and families. Despite women though being independent financially their social status in the society is not much changed because their work is considered inferiorly dignified due to the night working hours(Pradhan, 2005).            The call centers serve as avenue for the Indian call center agents to understand the culture, customs, and accent of the West through the costumers which they provide services. These Indian call center agents are also exposed to diverse culture of the people that they work with because foreigners also come to India and work as call center agents. The outsourcing thus also serves as a medium for the Indian people especially the youth who are working as call center agents to interact with foreigners of different languages and culture(Pradhan, 2005).            Though outsourcing provides positive impacts to the people in India, it also goes along with its negative attributes. Some call center agents due to the pressures in their work and night working hours undergo panic attacks, stress, relationship troubles, depression, eating disorders, alcoholism, and relatively no social life. Mental, psychological, and health disorders are also observed in outsourcing companies due to the desire of the worker to cope with the challenges in their work. The workers of these outsourcing provider companies are subjected to racial and cultural discrimination by people of the developed countries which they service. The nature of the working hours of these outsourcing workers also brought about social division wherein the working class youth are alienated with their peers because they are not able to socialize with them(Pradhan, 2005).            Change like the development of India’s business industry through outsourcing despite having various benefits also comes with diverse disadvantages. The government which benefits from the revenues and taxes which are generated through the outsourcing industry needs to have programs to help the employees of this work force be able to cope up with the challenges they encounter. In general, outsourcing brought about boost in the economy of India and is strengthening the value of rupee against the US dollar. References Ghimire, B. (2005). IT Job Outsourcing. Ubiquity  Retrieved January 29, 2008, from http://www.acm.org/ubiquity/views/v6i31_bhumika.html Nag, B. (2004). BUSINESS PROCESS OUTSOURCING: IMPACT AND IMPLICATIONS. Bulletin on Asia-Pacific Perspectives. Pradhan, J. P. a. V. A. (2005). Social and Cultural Impact of Outsourcing: Emerging Issues from Indian Call Centers. Harvard Asia Quarterly, from http://www.asiaquarterly.com/content/view/155/
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