6 reasons to outsource IT to India right now

A smoothly running IT department is an essential part of any business, especially now that work from home has become widespread and cloud computing has become more important. Europe alone faces a major shortage of around 30% of suitable IT personnel. And the professionals who are available come at a high price. In India, these good, experienced and affordable IT professionals can be found: in fact, India has the largest IT labor market in the world.

India is one of the most popular outsource destinations in the world, with around 65% of all outsourced IT and R&D globally being moved to India. Head of IT for Maier+Vidorno, IndiaConnected's partner in India, Satish Tripathi shares the six reasons why India is the best outsource option for your IT department or R&D team:  

1. An extensive pool of highly trained professionals

India has one of the largest talent pools in the world. Every year, around one and a half million students come from the country's top technical universities, eager to get a job with a foreign multinational. Becoming a web or mobile app developer is one of the most popular career options among young Indians. The abundance and availability of dedicated and trained offshore developers makes India the place to have an IT or R&D team up and running in a short span of time. In addition, Indian IT professionals are trained in the latest technological solutions and applications, which are still considered challenging in other places of the world. India not only pulls the proverbial outsourcing cart, but also takes the lead in implementing the latest technology trends.

2. Outsourcing in India is budget friendly

Cost is often the deciding factor in opting for outsourcing and in the case of India, perhaps the most tempting factor in setting up an IT department in this country. Development costs in India are 30-35% lower than in the US and Europe. The average hourly wage of an Indian IT professional varies, depending on knowledge and experience, between €15 and €35 per hour. This is considerably lower compared to the salaries of developers in Western countries, which are around 85 to 125 Euros per hour. Outsourcing your IT or R&D to India can save the company up to 65% of its operational costs.

3. Reliability and high quality standards

Companies providing outsourcing services in India deliver high quality work that meets all international standards. Indian outsource parties work with:

• The Capability Maturing Model (CMM), which indicates the level of software development in an organisation. The model distinguishes five levels, of which 1 is poorly developed and at 5 the development process runs like a well-oiled machine. More than 75% of the worldwide CMM Level 5 certified companies are located in India.

• The International Standard Organisation (ISO 9000), which guarantees the quality of design, development, production and installation. India has the most ISO-9000 certified software companies in the world.

• Total Quality Management (TQM)

• Six Sigma Quality Certification

• Customer Operations Performance Centre (COPC) that ensures the delivery of quality software within the deadline.

With the above standards and certifications, you as a company can be sure that an Indian IT or R&D team is providing your solutions with European quality. 

4. Communication is the key to success

Even though your IT or R&D team operates remotely, this does not affect smooth communication with the European headquarters. Not only because online conferencing is fully established by the corona crisis, but also because English is one of the main languages in India. India is the largest English-speaking country in the world. Good communication is essential for a successful start in India. For example, the the German IT company Optanium has not seen a single employee from its R&D team leave in seven years because of the strong bond of trust the German parent company has been able to build remotely with its employees in India.

5. Use the time difference to your advantage

India is 4.5 hours ahead of Europe, allowing you to solve problems before they will affect your European employees or users. This leads to greater efficiency, higher productivity and more space to focus on crucial tasks. Dutch company ARS Traffic & Transport Technology, a leading market player in technological traffic solutions, has had an R&D facility in India for twenty years for this reason. In addition to software development, the section control systems and matrix signs along Dutch highways are controlled from the Indian ARS T&TT office. "If a system fails, due to the time difference, we can repair the system before rush hour starts," told CEO Jan Linssen told us earlier at an interview.

6. Support from the Government of India

The IT industry is one of the largest sectors of the Indian economy and employs the majority of India's young workforce. The Indian government has therefore designed its policies to give this industry room to grow. With initiatives such as Digital India, which aims to make the country digitally more powerful in the field of technology, the government is trying to stimulate foreign investment in this sector even more. Therefore, you will have little trouble with legal or fiscal restrictions. 

Jump into the new, hybrid way of working - this is the time to outsource:

Many companies are trying to find their way in the post-pandemic world, which brings both financial and work-related challenges. Cutting your IT budget is actually impossible in this era of hybrid working, which is why outsourcing internal IT is a solution that can save companies a lot of money. With our new ways of working, physical distance is no longer a major obstacle to working with a remote IT team.

Wondering what benefits outsourcing has for your business? Get in touch with us:

Hiring in India during COVID-19: 'This is the best time'

The supply of highly skilled personnel in India has never been greater. Samriti Parashar, HR specialist for Maier + Vidorno, IndiaConnected's partner in India, shares her experiences and tips on how to handle the recruitment and interview process in the smartest way possible in COVID-19 times.

Contrary to what you might think, Samriti sees almost no decrease in the number of international companies looking for staff during this corona crisis. "On the contrary, companies see it as a perfect time to prepare for the period that will follow this crisis. You want to have the right management at the helm of your company during and after this difficult time. In addition, I have noticed that companies now have more time to go through the long recruitment and application process, which takes about four to five months."

Increased supply of highly skilled personnel

According to Samriti, finding good staff in India is easier than usual at the moment. With current global travel restrictions limiting the country's brain drain, Indians cannot currently work for a multinational company abroad so easily. "They are therefore more interested if we approach them for an option with an international company in India itself. We are also seeing a greater willingness among potential candidates to talk to us because of the economic uncertainties caused by the outbreak of the coronavirus. We therefore have a larger pool of strong candidates to fish from." 

How do you find that good staff in India?

According to Samriti, you do not need to deviate from your normal methods to find the right people, although it is advisable to do more active outreach as the crisis may not expect companies to be looking for staff. "We go through the CVs in our database as usual and search actively on Linkedin, that process remains the same." What does change are the follow-up steps, for example job interviews are conducted via video calls. "In principle, that doesn't make much difference to the application process, but normally I would advise a company to schedule a face-to-face meeting with the remaining candidates in India or at the European headquarters in the last round, and that is less easy than usual at the moment." 

Samriti's advice is to find someone in India you trust, such as a business partner, a mentor or one of the IndiaConnected experts, to conduct the final interview for you in person. "Through a video call you learn a lot about a candidate, but in a face-to-face meeting you can read each other's body language better and get a better feel for each other. It is therefore important that you are represented by someone who understands India, knows what your company needs and who dares to put the choice in your hands." If you do not have someone on the ground right now who can make this choice for you, Samriti says it is smart to test the candidates psychometrically. "This is normally a popular tool, but since the outbreak of the coronavirus we have seen that 95% of companies choose to carry out this test. This is because there is less opportunity to get a feel for someone in a face-to-face interview. The test measures intelligence, skills and personality traits and gives you insight into someone's independence, social skills and leadership qualities, for example. Companies feel more comfortable making a choice with these test results in hand."

Contracts in India during COVID-19

Samriti has not yet seen special additions to employment contracts as a result of the corona crisis. "In India, everyone has a trial period of three to six months as standard, which gives the employer the peace of mind to find out whether a candidate is really a good fit for the company. One exception I have seen was a company that had already selected a candidate for an open vacancy, but had not yet drawn up a contract when the coronavirus suddenly appeared around the corner. They had it put on record that they could reconsider whether the candidate could actually start two months later." Samriti does see an increase in additional conditions being laid down to make working from home as smooth as possible. Laptops, telephones and other hardware are often standard in the contract, but increasingly broad agreements are now being made about compensation for a good wifi network at home or an extended data plan for the telephone."

Do you need to draw up a contract for new employees in India and do you want to be sure that you meet all the requirements? Our HR experts can guide you through this process in many ways, from our HR Health Check to total administrative relief for your organisation in India.

Castings and forgings supplier Prins: "Within a few years, 40% of our production will come from India".

Prins, one of the largest international suppliers of casting and forgingshas been active in China for 23 years. In 2017, the Amersfoort-based company decided to take a look at the possibilities in India as well. "We no longer wanted to be solely dependent on China," explains Erik Sattler, Prins' CTO. "By also starting in India, we not only spread our risks, but our customers also have a more extensive choice in terms of production methods."

CTO Erik Sattler visiting an Indian foundry

Back to 2016. Trump comes to the helm in the United States and starts a trade war with China. At that point, Prins has been outsourcing a fair share of its cast and forgings production to China for about 20 years, but has been eyeing developments in India for a few years now. "We had been thinking about a possible move there since 2010, but we were still too busy with our 70 local suppliers and the internal organisation of Prins China," explains Sattler. "Setting up a company in India is something that you have to take your time for, immerse yourself in before you can start successfully there. But the global political developments made us, and our customers, want to have another production base besides China, so in 2017 we decided to go all the way for India."

Our agent in India was a stroke of luck'.

To reinforce this decision, Prins soon hired an Indian contact. "We ended up with Jay via via and that was a real stroke of luck," says Sattler. "He was familiar with our sector and our wishes. He also works for a German company, so he understands European standards and expectations very well." It is important to be sure that an agent is also working for another company, if an entity has not yet been set up in India. In this way, a company like Prins protects itself from the danger of being designated as a permanent establishment.

Prins has now reduced the number of suppliers in China to 40 and, with Jay's help, has started working with some 30 foundries and forges in India. "We are still in the sample process with most of these foundries in India," Sattler explains. "That means we are not yet producing on a large scale. It may seem strange to still be in such a preliminary phase after three years, but all our products are custom-made and we maintain high standards. So we first have to invest heavily in tools and models before we can really get going. Our customers have all been very satisfied so far and that is saying something, because they are all global players with a lot of requirements.

Direct contact via Whatsapp 

In terms of cooperation, too, Sattler sees fine advantages in producing in India. "All my contacts in India speak English well. I now have contact with the directors of the foundries from the Netherlands simply via WhatsApp." Direct contact results in more personal attention for the suppliers, an important aspect of doing business in India. "We, Europeans, want everything to be quick and businesslike, but the Indian directors find it very important to build a close, personal relationship with their Dutch business partners. It's one of the most important lessons I learned in India: don't avoid that personal relationship, it will cost you your success."

The direct contact also enables Sattler to call Indian suppliers to account for undesirable behaviour. "We regularly have to deal with the Indian hierarchy. My Indian colleagues simply can't get through to such a director and things only change when I get on the phone. The good relationship then ensures that I can address them directly about their behaviour. As long as you don't hang up the phone every week with that message, you notice that there is openness on the other side to adapt to our way of working."

We left the setting up of an entity to experts'.

Now that Prins has laid the foundation in India, it is time for the next step. "First of all, we need to build up volume. We ship around 400 containers from China every year, and we want to work towards this in India as well. In addition, we want to set up a similar logistics and test centre in India as we have in China. That is important to be able to guarantee the quality for our customers, but it also means that we will be hiring extra people in the short term." 

Prins therefore started setting up its own entity in India a year ago. "We learned a lot when setting up our business in China, including that it takes a lot of extra time," says Sattler. "So this time we decided to do it together with the experts from IndiaConnected. India can be enormously bureaucratic; it obviously took a gigantic paper mill to set up our company. But we fortunately didn't have to deal with that, because IndiaConnected took care of that burden, and so we could focus fully on important matters."

Producing in India during the coronavirus

The outbreak of the coronavirus has somewhat delayed Prins's goals in India, but Sattler is looking forward to 2021 positively. "All the producers we work with have meanwhile started up again. We did experience delays with a number of deliveries, but so far our customers are very satisfied with the products that come from India. Especially the interesting price/quality ratio. In some areas, China is becoming a bit expensive. I expect that within a few years, 40% of our production will come from India."