Best Practices for Outsourcing to India
India has been popular for its vast talent pool and has continuously proved to be one of the best destinations for numerous global companies to outsource their services or tasks.
June 20, 2022
According to Hexagon consulting, India's outsourcing industry is approximately $118 billion, proving the country's dominance in the outsourcing sector.
Due to its extra edge regarding knowledge-based business services, India has become a favorite destination for almost all business services.

Most companies now outsource work to India to scale their business operations while saving on costs. From industry giants like Google, Microsoft, and IBM, to startups, every industry is doing it.

Over the years, the outsourcing industry has touched companies from accountants to researchers to medical professionals. And with India's expertise and efficiency in performing outsourced work, businesses often look at increased ROI and profits in no time.
What is Outsourcing?
Outsourcing is when businesses hire an external party to handle some of their tasks or services. This includes tasks and services that don't have to be handled in-house, such as data entry, customer support, etc.

Instead of doing the work, companies hire service providers to do those tasks. This gives them sufficient time to focus on other core activities critical to business growth.
History of the Outsourcing Industry in India
Outsourcing is not a new concept. It began way back around the 1700s when various manufacturers began shifting the manufacturing process of goods to different countries offering cheaper labor during the Industrial Revolution. But while the outsourcing industry has existed that long, it was in the early '90s that businesses experienced the emergence of outsourcing to India.

First, some global airlines started outsourcing most of their back-office support to India, followed by IT companies. Among the earliest participants in the Indian outsourcing industry include American Express, Texas Instruments, Swissair, GE, and British Airways.

Therefore, even after several years of competitive outsourcing worldwide, most of it still lands in India. Over the years, the Indian industry has designed robust processes to offer the best quality services, including IT software and technology.
5 Most Common Services/Tasks Outsourced to India
India is a powerful and undisputed force in the outsourcing industry. The Indian workforce ensures affordable rates for quality work.

While it's possible to outsource various services and tasks to India, here are the most popular ones:
Information Technology (IT)
The critical IT support services needed by different industries include:

Website and Mobile App Development
Technical support
Software Development
IT services often require specialized expertise and equipment. Therefore, there is a need to train an in-house team and set up the necessary infrastructure. Unfortunately, this process can be super expensive and time-consuming.

Instead, you can outsource this service to the Indian software industry since they have ready infrastructure and skilled software developers with the necessary expertise for the job. This saves you time freeing up your resources and time to focus on the growth of your business. Besides, you don't have to worry about the quality of work.
Customer Support Services
Running any type of business demands proper ways to address your customers' concerns and needs. If you answer questions on time, you create a chance to build customer loyalty. However, answering numerous customer calls and responding to their emails can be tedious and time-consuming.

That's why businesses outsource this service to third-party call centers that can attend to customers' needs efficiently and quickly. Due to the skilled labor, affordability, and other advantages, most companies choose India as the perfect outsourcing center. They have a dedicated staff and reliable technology to provide steady support round the clock.
Business Process Outsourcing (BPO)Services
BPO describes business practices in the current competitive climate. Companies outsource various business processes to external parties who can help them handle essential tasks while saving and freeing up time and cutting costs.

BPO can be divided into the front office and back-office support services. Back office BPO that companies outsource includes internal business features such as fraud protection, inventory purchasing, content moderation, billing, application, and document verification. Front office BPO entails external activities such as customer service and marketing.
Graphic Design Services
Most companies think they can handle their own design tasks. While it's possible, very few do it well. Outsourcing design tasks help you develop fresh ideas and create a new outlook on your business design projects.

Businesses achieve better quality results when they outsource their artwork creations, including:

  • Advertising banners
  • Logos
  • Website image
  • Multimedia presentations
  • Moreover, outsourcing design tasks to the Indian industry is a cost-effective way to minimize overhead and labor expenses.
Digital Marketing Services
Digital marketing has become a key tool for keeping your business in touch with the target market. It has considerably grown over the years, creating a significant marketing opportunity for companies that make the most of it. However, managing digital platforms can take so much time. According to a survey, maintaining one online site may need up to 32 hours every month.

Since digital marketing for commerce requires a set of standards and skills and is time-consuming, hiring a service provider with expertise is frequently the best solution.

In this case, outsourcing digital marketing to an expert means entrusting your business digital marketing services to someone with experience in advertising campaigns, constantly driving engagement, and developing new ideas.
Advantages of Outsourcing to India
There are numerous reasons for which large enterprises and early-stage startups outsource some part of their business to India. A Deloitte study found that more than 59% of companies are already outsourcing in India, while 22% who aren't currently outsourcing in India already have plans to do the same over time.

These could be because of the following points:
Most companies prefer to outsource their services to offshore providers to save costs. India has a lower cost of living than other developed countries like the UK, Australia, and the US. This directly impacts your expenses since you'll pay a fraction of what you'd have to pay other employees. Besides, India's availability of ready infrastructure results in reduced startup costs.

Good Communication
Outsourcing issues often arise when there's a lack of effective communication due to the language barrier. However, most Indians speak and understand fluent English because of the medium of instruction for higher education in English. According to a 2019 study, India is in the 5th position among Asian countries proficient in English. This means businesses have no trouble understanding each other about work requirements when they communicate with the Indian workforce.

Access to skilled talent
The availability of a skilled workforce with plenty of experience is why businesses outsource to the Indian market. India produces many qualified individuals from numerous reputable colleges and universities each year. These professionals are often well-versed with high-quality technology and world-class business practices to handle your tasks efficiently.

Advanced outsourcing infrastructure & technology
Some commonly outsourced tasks such as customer support need dedicated infrastructure and technology. Fortunately, Indian business sectors heavily focus on deploying the latest and most advanced infrastructure and technologies. This makes Indian firms provide seamless services to critical projects at a competitive price to other countries.

Disadvantages of Outsourcing to India
Despite the benefits and advantages of outsourcing to India, drawbacks still abound. Companies should always weigh both before deciding to outsource their business processes.

The difference in Time Zones
While most Indians speak fluent English, you might still have communication challenges due to time zone differences, which delays you when you want to get a message across. For example, sometimes you need to explain things via a video call, but the time difference makes it hard to organize the calls.

Lack of monitoring
With an outsourced staff working several miles away, it can be challenging to monitor their work activity. Since most outsourcing firms are paid per hour, it's important to know how many hours a project takes to be completed. For example, you could be billed for six hours when it only took four hours to do the job. However, you might not know if the staff is actually working on your task.

Data leak risks
Once the company data is outsourced for a project, they no longer have sole control over it. This creates risks to business data and customers' information. Therefore, companies must consider safety and security before choosing an outsourcing partner.

The Steps Involved in Outsourcing to India
If you want to outsource to India but wonder how to start or the rules and best practices involved, here are four main steps to guide you.

1. Learn the rules and best practices of the outsourcing in your niche
The first and most crucial step is to learn how outsourcing works in your specific niche. The Indian outsourcing market delivers to a wide variety of businesses. So without a clear idea of how it functions, it can be challenging to outsource projects to India.

You can achieve this by:

Learning about tasks commonly outsourced in your niche
Identify the challenges and risks involved
Check other firms' measures against these risks.
Knowing how the industry works make you understand essential factors before leveraging them for your business.

2. Determine services or functions you can outsource
Identify and decide on functions or areas of your business that can be outsourced. Outsourcing isn't always about saving costs. You should first know which business processes you are willing to hand control over to an external party. The best rule is never to outsource your core activities. For example, outsourcing might not be good if your company is perfect at digital marketing. Start by identifying the non-core tasks that your company is lacking. Assess the resources and cost of the planning and implementation of outsourcing these tasks. This will allow you to understand the list of functions you are willing to outsource.

3. Evaluate and partner with a suitable service provider
With numerous firms available to cater to your niche, an informed decision is essential when choosing an outsourcing company. This service provider will be a central part of your business, just like the in-house staff.

Write a Request for Proposal (RFP) to a potential Indian outsourcing firms
Evaluate all the proposals received and select the most suitable Indian service provider
Look for reviews on your potential vendor and ask questions about the company

4. Utilize The Right Tools
One of the main challenges of outsourcing involves how to bridge the thousands of miles gap between you and your outsourced staff. How do you communicate effectively, manage tasks and share relevant files, or monitor your outsourced remote team during work hours?

All these become easy with the right set of tools, including:

Project management tools- delegate tasks, share and store files and monitor work progress.
Communication Tools- Creates space for team-specific communication, updating staff on the work progress, holding project meetings, and sharing detailed project discussions. Tools like Slack, Skype and Zoom are helpful.
Monitoring Tools- These help you monitor work progress and hold the firm accountable for any delays or other issues with the project. Lack of monitoring makes it hard to know how long the outsourced staff has worked on your task, if they are misusing the work hours, or if the project actually took the amount of time indicated. Luckily, you can use monitoring tools like HiveDesk to track the time your outsourced staff works on a project.X

Outsourcing to India is an excellent way of saving costs while getting high-quality work with increased benefits. You can even rent equipment where possible to further minimize the operation cost. However, from the project's onset, ensure you constantly monitor the implementation from the initial stages to the end of the project.