Outsourcing is one of the fastest growing industry on the world platform. It involves transfer of large segments of internal production processes, business to the external service provider. In addition, it basically helps a company to focus on its core activities. The main purpose is to save time, money and resources. Furthermore, it is classified into IT, human resource, legal, R&D etc. Indian outsourcing industry is worth almost $150 billion.
India is a leader in IT enabled services. It is known as the destination for low cost technology skills wealth, high quality and job creation. Today, the same $150 billion outsourcing industry is at a point where future is unknown.
Rapid shifts in technology needs, Brexit, Donald trump as the US president- due to these reasons the industry is in the upside down situation. Furthermore, Nasscoms’ latest growth projection states the decline in growth to 10% in 2016-17 from 12% in 2014-15. The revenues of top 5 companies listed on the BSE reduce by 50% in the past five years.Donald trump’s decisions will affect many businesses by the way he takes the decisions regarding business with India. The companies are not hiring people due to the dynamic changing business environment.
Recently, in August 2016, Infosys loses a contract with Royal bank of Scotland following the Brexit referendum. Consequently, the Bengaluru-based company dismisses 3000 employees. As per the CEO, Vishal Sikka, the revenues fell by 1.4% in the December ended quarter.
TCS is the leader in outsourcing industry. The company records the slowest growth in Q2 in the history as there was shift in business model towards software platform and chased digital contacts.
Donald trump’s idea to scrap the H-1B visas may have larger impact. Though, US accounts for 50-60% of the revenues of Indian IT companies. The Indian outsourcing giants Tata Consultancy Services, Infosys and Wipro are heavy users of the H-1B visas.
