Information+flows


 * International outsourcing**

Outsourcing is said to take place when some aspects of a business operation is contracted out to an external company. Or it is ….. // ‘’The concept of taking internal company functions and paying an outside firm to handle them. Outsourcing is done to save money, improve quality or free company resources for other activities’’. //

International Outsourcing refers to contracting services to an offshore, rather than domestic, company. Outsourcing has become a major management tool in recent years because it is cost effective and some tasks can be handled by professionals.

**Role of ICT in International Outsourcing - India’s ICT industry.**


 * The India Software Industry has brought about a tremendous success for the emerging economy.
 * The software industry is the main component of the Information technology in India.
 * India's pool of young aged manpower is the key behind this success story.
 * Presently there are more than 500 software firms in the country in India.
 * The Indian Software Industry has grown from a mere US $ 150 million in 1991-92 to a staggering US $ 5.7 billion in 1999-2000.
 * India's software exports reached total revenues of Rs. 46100 crores. The total share of India's exports in the global market rose form 4.9 per cent in 1997 to 20.4 percent in 2002-03.
 * It is expected that the India Software Industry will generate a total employment of around four million people.
 * Today, the Software Industry in India exports software and services to nearly 95 countries around the world.
 * The share of North America (U.S. & Canada) in India's software exports is about 61 per cent.
 * In 1999-2000, more than one third of Fortune 500 companies outsourced their software requirements to India.
 * The is a tremendous increase in the number of companies in MEDC that are outsourcing their software to India.
 * Bangalore is now the “Silicon Plateau” of India.
 * High Tech firms like Motorola, IBM, HP, Sony, Toshiba have subcontracted parts of their software contracts to India.

Cheap, highly skilled and large workforce (software professionals). Large number of research institutions and Univs. Low rainfall and low temperatures in Bangalore Advantage for western firms in terms of access to Asian markets
 * Indian (Bangalore) is an ideal location for software companies for the following reasons ** :

In 1986, the Indian government announced a new software policy which was designed to serve as a catalyst for the software industry. This was followed in 1988 with the World Market Policy and the establishment of the Software Technology Parks of India (STP) scheme. In addition, to attract foreign direct investment, the Indian Government permitted foreign equity of up to 100 percent and duty free import on all inputs and products
 * The Government has also played a vital role in the development of the India Software Industry **.

Employment opportunities increase in wealth among Indians Break in caste system due to increase in wealth Dev’t of communication infrastructure Improved standard of living and access to services
 * Benefits of Outsourcing to India **

Encourage rural urban migration Low cost of labor leads to maximum profits Cheap products for US consumers Loss of jobs Loss of revenue through taxes
 * Disadvantages **
 * Benefits to MEDC. E.g US **
 * Cost to the MEDC eg. USA **