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Knowledge Process Outsourcing (KPO) Services

Why Choose India : KPO Experts India

Why India To Be preferred to other countries

Due to a large knowledge pool and a significant cost arbitrage, few countries like India, Philippines and China are front runners in providing outsourced services. After achieving great success in BPO, India is now looking for a big leap in KPO. India automatically becomes a natural choice if we anaylse the comparative costs of various aspects of KPO for different countries.

 

Basis of the Comparison of following factors in countries: India, Philippines, Russia, China, Canada, Ireland and Mexico

 

• Labor Pool
• Cost
• Government Polices
• Infrastructure
• Knowledge full / Expertise

 

Labor Pool

India has many prestigious technical universities and the Indian Institute of Technology stands apart as one of the world's best. India produces over 75,000 IT graduates and 20 lacs English-speaking graduates annually.

 

The Philippines turns out 380,000 graduates annually, but only 15,000 of have core technology knowledge. The country has cultural affinities with the U.S. and is well-versed in U.S. accounting and customer service standards and has low employee turnover.

 

Russia can claim the third largest population of engineers and scientists per capita but the bad news is that not many of them speak English.

 

China's technical schools turn out 50,000 graduates annually, many of whom migrate west. Those who stay generally don't speak English.

 

U.S. neighbor Canada to the north has solid educational system, with a qualified labor force of more than 16 million.

 

In Ireland Relatively small; 34,000 graduates annually, 5,000 of them technical.

 

Mexico provides U.S. companies with millions of Spanish-speaking people to staff call centres.

Labor Costs:

In India Labor costs have crept upward over the years but have been offset by falling telecom rates. Typical salaries range from $5,000 to $12,000 for technical staff, while back-office salaries range from $3,500 to $7,500.

 

In PHILIPPINES Higher labor costs than India; technical salaries range from $5,000 to $10,000 annually and back office from $3,000 to $8,000.

 

In Russia IT salaries range from $6,000 to $10,000. The country hasn't yet developed back-office competence. Telecom infrastructure costs are higher than average.

 

In China IT salaries range from $3,000 to $8,000 annually. No real BPO competency.

 

In Canada Being a nearshore alternative to the U.S. means IT salaries are much higher than most offshore countries, ranging from $25,000 to $50,000. Being a nearshore alternative to the U.S. means IT salaries are much higher than most offshore countries, ranging from $25,000 to $50,000.

 

In Mexico Low labor costs; companies can save up to 50% by outsourcing to Mexico. Costs could be offset by unreliable infrastructure.

 

In Ireland Tech salaries range from $25,000 to $35,000, making Ireland unattractive if primary objective is cost savings.

 

Government Policies

Outsourcing is so imbibed in the fabric in the country and the Indian government has a national minister specifically for IT. The government favors IT foreign ownership and imposes no export taxes.

 

In Philippines Government exempts companies from export taxes, fees, dues and licenses if they open in one of the country's IT parks. Government's task force charged with development of IT and knowledge process outsourcing (KPO) services.

 

In Russia Government is erratic and, for now, sticking by old tax laws and structures that don't benefit business. But a treaty with the U.S. could change things down the road.

 

China's government has hampered growth due to trade policies and over regulation; intellectual property concerns linger. The hope is that these issues will evaporate as China blends into the World Trade Organization.

 

In Canada Low or no political risk. Government gives tax breaks on IT exports. NAFTA provides free trade market for IT services.

 

In Mexico NAFTA has opened up free trade markets, but Mexican government does not offer high level of incentives.

 

In Ireland Favorable tax laws and $330 million technology-education fund provide incentives. Low or no political risk.

 

Infrastructure:

In India with redundant telecom and utility infrastructure, there is very good reliability within India's special IT parks. Reliability can be spotty outside the parks or in more remote areas.

In Philippines IT parks that have sprung up over the past 13 years fuel the export industry. Abandoned U.S. military bases left behind dependable telecom infrastructure.
In Russia Infrastructure quality and quantity nosedives when outside of Russia's few IT parks.

In China Infrastructure can be spotty outside major cities, but China is building networks, particularly telecommunications, almost as fast as the U.S.
In Canada Solid telecom infrastructure.
In mexico Solid inside the technology parks
In Ireland Solid.


Expertise:

In India Application development, maintenance, financial processing. Experts see India becoming a hotbed for more critical analytical jobs.
In Philippines Accounting, finance, animation, human resources.
In Russia Web design, complex software development, aerospace engineering.
In China Transaction processing, low-end software development and maintenance.
In Canada Software development and maintenance, tech support.
In Mexico Spanish-language call centers, software development, data center outsourcing.
In Ireland European shared-services centers, software development.


Customers:

For India Citigroup, GE Capital and American Express have a very large presence and have set up their own centers here.
For PHILIPPINES Procter & Gamble, American International Group, Citigroup.
For RUSSIA Boeing.
For CHINA HSBC, Microsoft.
For CANADA Allmerica, Agilent.
For MEXICO AOL Time Warner, General Motors, IBM
For IRELAND Intel, Dell, Microsoft

Why is India the preferred KPO destination?

The analysis of above data shall reveal that India becomes automatically a preferred choice of the outsourcing countries. India has a growing population of educated people capable of handling high-end knowledge-based work and research. With a huge talent pool, India could emerge as a global KPO hub as the sector requires specialized knowledge in respective verticals.With the mushrooming of engineering and technical institutes in India, there will no shortage of skilled manpower in India. A Confederation of Indian Industry study states that India's transition from a BPO destination to a KPO destination is imminent.

 

The cost advantage:

India also gets advantage in terms of cost advantage and more and more companies are turning to India for offshoring KPO work as quality work gets done at cheaper rates. For instance, drafting and filing of patent applications in the US is very expensive. A typical application costs about $10,000 to $15,000 to draft and file with the United States Patent and Trademark Office. Companies can save up to 50 per cent of the cost by offshoring the work to India.

 

More foreign firms head for India

The testimony to the fact that India is being chosen as preferred country becomes evident as many companies such as Patent Metrix, Cantor-Colburn and Schwegman, Lundberg, and Woessner & Kluth have already set up offices in India. Offshoring R&D in pharmaceuticals and biotechnology also has enormous potential for KPO. Pharma majors Astra Zeneca and GlaxoSmithKline have set up drug discovery centres at low-cost destinations to boost their research and development activities. Even for R&D in software and chip design, major telecom and IT companies opt for India. Motorola, Intel, IBM, Cisco, Texas Instruments, Nokia and Philips have set up offshore design centres in India.

 

Further testimony comes from a report of India Times:

"It’s good news for Indian knowledge process outsourcing (KPO) firms. India is the most attractive destination for KPO activities, says a study by independent research company Asset Management in collaboration with Kelly Services. The study shows India will have a higher growth rate in KPO segment of 45% compared with 25% in the BPO segment. The latter will, however, remain the lead revenue earner and job creator due to the volume nature of this industry."

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