The Future of Outsourcing – Opportunities and Challenges for India - I Research and Development
Product Innovation - Companies are going beyond basic research to invest in
innovation and new product development. Companies that have invested in R&D in India are Cisco Systems, Motorola, Hewlett-Packard, Google General Motors Corp. and Boeing Co among others.
Co-development- In
pharmaceuticals, India has the opportunity of co
-development and ownership of new patented drugs through
drug research, clinical trials and manufacturing. Indian pharma major
Ranbaxy has an agreement with
MNC GlaxoSmithKline to commercialize compounds they develop together.
Legal Outsourcing India ’s large pool of qualified English-speaking lawyers with experience in the British legal system can offer paralegal support, legal support and patent services. A few Indian companies affiliated with American law firms are now able capture a tiny piece of the American market. They are now doing legal research at very high rates by Indian standards but yet 50% below typical American rates.
Engineering Outsourcing India can provide high-quality engineering services in the fields of:
Mechanical & Electronic engineering
- analysis and design , embedded software
Plant Design, Process Engineering
Plant Automation Services
Enterprise Asset Management and OEM solutions
Remote Infrastructure Management Services India can offer management services for IT infrastructure, applications operations, IT security and maintenance. This sector presents great potential through large-value multi-year contracts
Accounting Services We are in the initial stage where payroll processing and some accounting is being done for large American companies. This trend will continue and soon a full range of accounting and tax services will be provided by Indian companies.
Outsourcing opportunities for India exist in
other fields like Financial Research, content development, medical writing: animation, film, publishing, web services; Human Resource outsourcing: recruitment, training, Education, Nanotechnology and many others.
Challenges for India
Rising competition
In the next ten years, China will replace India in its number 1 position in the global ITES-BPO industry.
Rising costs and low efficiency in many cities like Bangalore will make software outsourcing less attractive in 2006. The giants may show a drop in earnings.
India ’s terrible Infrastructure will continue to be a drag on the potential of India giving other countries the competitive advantage.
Other competing countries providing low-cost outsourcing options will exert a downward push on costs – East Europe, Latin America, South Africa
Infrastructure
India ’s ability to develop infrastructure is far outpaced by neighboring China
Metro cities are getting saturated and costs are rising -- Tier II towns need to develop infrastructure but India’s track record does not bode well for fast development.
Human resources and training
The demand-supply gap in India for knowledge workers is being felt now in Bangalore but may peak India wide in 2008-2009
The education system needs transformation to produce people with skill sets that match industry needs.
The transition to knowledge processing will be a much bigger challenge for the Indian company and employee than it was for BPO services. The typical college graduate many not have background or flexibility to understand global issues required by this type of service...