| India has long been a favorite outsourcing destination | | | | questioned the credibility of outsourcing firms and their |
| for businesses across the world because of its high | | | | proceedings. Satyam was a premier brand name in |
| quality of services and cost competitive prices. | | | | the IT outsourcing industry and fraudulent dealings had |
| However, with the unfavorable economic climate and | | | | taken everyone by surprise. On top of it, there have |
| recent incidents of account frauds and security threats, | | | | also been couple of cases of credit card frauds in the |
| there have been hiccups in the otherwise seamless | | | | past. All this news has managed to scare off |
| industry. And because of these very incidents the | | | | outsourcing clients and made them extra cautious |
| Indian outsourcing industry has been shaken. | | | | about investing money. |
| And at this day, it is facing a good amount of | | | | However, outsourcing service providers have adopted |
| challenges as well. Let us look at some of the potential | | | | strict privacy policies and security measures that |
| challenges faced by the industry and how it is | | | | ensure total protection of data. The office premises |
| overcoming the same. | | | | have secure environments and employees are briefed |
| Cheaper Services offered by countries like China and | | | | about the security policies as well. This makes sure |
| Russia | | | | that client data is not misused. |
| With the boom in the outsourcing industry, many new | | | | Geographical and Time line Differences |
| service providers have mushroomed in countries like | | | | Since India falls in a different time zone, many western |
| China and Russia that claim offer cheaper services. | | | | countries often find it difficult to coordinate. For |
| However, these vendors are relatively new in the | | | | example, their business day begins when the day ends |
| market and thus lack the experience and expertise | | | | in India. Thus there is very less time that is actively |
| that is needed to process outsourcing tasks efficiently. | | | | common and all the live business communication. |
| Outsourcing only for cost reduction is the biggest | | | | However, this might as well work in favor of business |
| mistake businesses can ever make. Rather, | | | | proceedings. Because India has an advantage of |
| outsourcing decisions should be made based on a | | | | earlier time, the business day starts earlier here than it |
| combination of factors like cost, expertise, industry | | | | does in western countries. So, any work that is |
| experience, quality of services, responsiveness and | | | | outsourced on a day can be completed and reverted |
| flexibility of the service provider. Apart from reducing | | | | back before the start of the day there. |
| the cost investments, the outsourcing deal should also | | | | Intellectual Property Issues |
| seek to enhance the quality of the business processes | | | | One of the major threats to outsourcing to offshore |
| that are outsourced. Moreover, these countries have | | | | continents is intellectual property thefts. It is important |
| issues like language problems, cultural differences, | | | | that companies adopt strict protection measures to |
| geopolitical instability, and the risk of stolen intellectual | | | | ensure against the same. Outsourcing vendors often |
| property. | | | | disable the USB drives on the computer systems in |
| Security Risks perceived by Clients | | | | order to prevent employees from taking data outside |
| The recent incident of accounting fraud at Satyam has | | | | the office premises etc. |