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General Definition:
The procuring of services or products from a third party with a view to increasing efficiency and productivity in ongoing business processes and for cost cutting.
Why Outsource:
The macroeconomic scenario today - increasing competition and falling margins - means, for corporates around the world, cost cutting and increasing productivity are not options anymore but necessities. Therefore, outsourcing makes economic sense for all concerned. By transferring non-core activities to companies for whom these activities represent their core competence, a business just does not save money, it also builds on its capability and increases its access to a wider pool of manpower resources.
Why Outsource IT to India:
A booming IT industry, recognized the world over (65% of the CMM Level 5 companies are in
India ). India exports software to 95 countries around the world. A huge pool of English-speaking, skilled workforce. The manpower cost in India is approximately one-tenth of what it is overseas. India
produces about 100,000 engineering graduates per year.
IT is a major thrust area for the government of India. The National IT Task Force recently submitted a 108-point Action Plan to promote IT in the country. A separate Ministry of Information Technology has been set-up to expedite swift approval and implementation of IT projects and to streamline all the regulatory processes. Further, India is one of the few countries in the world to have legislated an Information Technology Act 2000.