Future of Outsourcing in India: Most Likely Scenario


    ValueNotes Database writes a very interesting article on The Future of Outsourcing India : 8 Likely Scenarios in this week’s lead article in this very forum.

    In my opinion, the most likely scenario is Scenario No. 6. Scarcity Amid Plenty.

    The Article says:

    India continues to get most of the low quality, volume-based work, but the higher end, more intellectual work doesn’t come in the same proportion. A dearth of talent leads to poaching and severe pressure on salaries, which erodes India’s cost advantage. American client firms start to look at other competing destinations like China, Philippines and East European countries. India loses its other strategic advantage — the ability to ramp up quickly. Large outsourcing companies find it difficult to scale up and become more aggressive in acquiring or building overseas capacity.

    Many offshored large projects will run into problems just because of the underestimation of effort involved in making offshore projects successful. That combined with escalating salaries and only a small pool of experienced people to manage the huge inflow of very large projects, many purely offshore projects will go back to an On-site + Offshore kind of configuration. Many Indian companies like Infosys, TCS and Wipro will go on a buying binge of companies in countries like US and UK.

    H1-Bs will again soar to Dot com levels – 200,000 or so since the last five years have seen Computer Science enrollments in US universities drop by 50%, many baby boomers retiring and many projects needing people from India to serve as onsite representatives of offshore companies.

    There is a way India can save many of these projects – if they focus on improving communications in projects rather than rely upon mechanistic approaches like CMM which just guarantee that if you are doing dumb things, you do it according to a process! Software Development methodologies are an evolving science. The methodologies we have currently are milestones in our journey to better software development, not the destination! The end goal of software is to help someone do their job better, not the fulfillment of just a contract!