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.

The corona crisis has accelerated India: these developments you need to keep an eye on as a European company

The Indian lockdowns made doing business in the country difficult for a few weeks: mass homeworking, disrupted export chains and production lines that came to a halt. But at the same time, a lot of new, enduring habits also developed that actually offer companies interesting opportunities in the long run. At least, if you know where to look. Shashank Verma, head of Sales Order Management for Maier + Vidorno, IndiaConnected's partner in India, shares which sectors you should keep a sharp eye on in the coming period.

From cash to online payments: e-commerce is booming

According to Verma, India had to make a big switch when the Modi government announced the first lockdown in mid-March. "India got locked down at home in one fell swoop, so everything, even groceries, had to be delivered. This has made online shopping commonplace in India overnight. We are even seeing an increase in online car sales. Normally here in India we go to big shopping malls a lot, but now everyone tries to stay away from big crowds as much as possible. Online shopping is the efficient and safe solution and it will certainly remain the preferred option until a vaccine is found." 

Despite the fact that in India it is quite normal to pay cash at the door for your product ordered online, the big online platforms like Amazon India, BigBasket, Flipkart and Zomato soon stopped accepting cash. They thereby pushed consumers to switch to online payment apps like Paytm. According to Verma, this is a very important development for companies looking to explore the Indian e-commerce market. "A cash payment normally has disadvantages for a company. The seller has to pay extra tax if cash is received and cannot, for example, charge for delivery if the customer refuses the product at the door. These drawbacks are falling away as online shopping and online payment become the new normal in India."

'India is going to knock China off its throne as the best place to manufacture'

Until the outbreak of the COVID-19 virus, entrepreneurs quickly thought of China when outsourcing their production, but the current situation shows that it is smart to spread the opportunities. Fokker Elmo did that by not starting a second factory in China, but by building a new one in India. They are reaping the benefits of this during this crisis. Verma sees that the Indian government also wants to grasp this opportunity with both hands. "One of the big challenges if you want to manufacture in India is to buy industrial land. The states have therefore all been instructed to look for land that can be made available for this purpose and with success. In total, an area twice the size of Luxembourg is now available for manufacturers who want to move from China to India or open a second manufacturing facility."

"Also, India wants to raise its profile as an export country," Verma says. "We will therefore see regulations relaxed for companies that do produce in India, but do not enter the Indian market with their products. A prime example is General Motors, they have stopped selling in India since 2017, but still produce for export." The new, Indian PLI subsidy further endorses this endeavour. Smartphone manufacturers can use this scheme to move their production to India in a very cost-effective way. "Apple is therefore already coming this way and we hear rumours that Samsung may also expand its factory. This success has whetted the appetite of our government for more, so I expect there will be incentives for other sectors as well."

India wants technological solutions that limit human contact

According to Verma, the outbreak of the coronavirus in India has increased the need for self-service options. "Companies that have technological solutions that reduce the need for human contact for simple daily tasks such as filling up with fuel, washing the car or checking out, should certainly look into the Indian market. Because of the current situation, the interest in solutions that can be done independently or even remotely is high. And this applies not only to consumers, but also, for example, to the distribution, agriculture and medical sectors."

Verma also expects India to be able to offer international companies more in this area. "We normally see many young, intelligent and technically skilled Indians leaving for abroad, but the corona crisis has prevented that from happening. So there is less 'brain drain' at the moment and this group would like to develop within an international organisation. This will create a win-win situation for companies looking for motivated and ambitious talent." 

Vocal about local and let's make it global'

The Indian Government's support plan to lead the country out of the corona crisis sounded very isolationist. President Modi encouraged his country to buy as many Indian products as possible: 'be vocal about local'. "Yet international companies need not worry about their position in the country, India is very keen to bring in more foreign investment," says Verma. "India normally imports billions of products from China and the outbreak of the virus has brought home to us the fact that we need to be less dependent on imports. So the statement 'vocal for local' is not to deter companies from coming to India, but to encourage Indians to produce more products domestically. At the same time, we see the arrival of foreign companies as a great opportunity for our country."

Wondering what opportunities exist in India for your business?