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Business Process Outsourcing and India

Management Online REview (MORE), September 2008

22 Pages Posted: 18 Oct 2007 Last revised: 27 May 2011

Date Written: October 18, 2007


Business Process Outsourcing is the leveraging of technology or specialist process vendors to provide and manage an organization's critical and/or non-critical enterprise processes and applications. Outsourcing, Offshore-Outsourcing and Off-shoring are used interchangeably despite important technical differences. Outsourcing involves the transfer of organizational function to a third party; when the third party is located in another country the term Offshore-Outsourcing should be used. Off-shoring in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. Outsourcing and off-shoring are not new concepts to the global economy. Earlier, off-shoring was mostly restricted to manufacturing through technology-transfer during the maturity and decline phases of product life cycle. Major advantages of outsourcing are cost-reduction, comparative advantage by division of labor and economies of scale, lower turn-around time, data-backup for disaster management. Areas of concern are service quality, data-theft, attrition rate, privacy laws and personal-information misuse and credit-card frauds. There are other issues also like job-lose in the outsourcing country, cultural differences and information security. The Indian outsourcing industry is growing fast and has become a major investment area. With increased focus on information security and a comprehensive IT act it is going to get a further impetus in coming years.

Keywords: Business Process Outsourcing, BPO, Outsourcing, Offshoring, Offshore Outsourcing, India

Suggested Citation

Mukherjee, Sumitro, Business Process Outsourcing and India (October 18, 2007). Management Online REview (MORE), September 2008. Available at SSRN:
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