Intel. IBM. Microsoft. Amazon. Google. Accenture. What do all these Fortune 500 companies have in common? Apart from being on the Fortune 500 list, that is?
They are all in India. If this is not surprising, the reason why they are here should be. They are all here because they believe this is where the market growth and talent is. Not cheaper resources, but better resources!
Last December I attended a National Conference on “The Changing Role of India in Global IT Business” organized by the Confederation of Indian Industry (CII). The theme of the Conference was how the IT industry in India is moving up the Value chain and hence was no longer about Cost Arbitrage.
One of the keynote speakers, Mr. Sriram Rajamani (Assistant Managing Director, Microsoft Research, India), spoke passionately on how Intel and Microsoft are in India because of the R&D advantages India provides. In fact he remarked on how it costs more for Microsoft to be in Bangalore than in Silicon Valley! Today, India is Armonk, New York-based IBM’s biggest geography outside the US in terms of headcount. And for Redmond-based Microsoft Corporation, India is its fastest growing market in the world. In fact, India is Microsoft’s only region outside the US that has an end-to-end presence across its six business units
So much for the cost factor! True, the main consideration for outsourcing used to be cost, but more and more companies are realizing that being part of a truly global marketplace means that business products and services can be created globally anywhere and marketed locally.
Of course, outsourcing is also seen as a high-risk venture, especially by SME businesses whose ability to take risks may be smaller. This is where Dedicated Global teams can make a huge difference – not just cheaper or better resources, but cost and profit sharing, newer market reach and enhanced product development and support.