Sources of Competitiveness of Offshore IT Service Providers in India: Towards a Conceptual Framework

Abstract

Rapid growth in the offshoring of information technology services by advanced industrialized countries to less developed countries in recent years has been accompanied by a voluminous amount of research on the subject. However, most research to date has tended to focus on the clients while research on offshore service providers (OSPs), particularly from developing countries, remains scant. This paper adds to the literature on offshoring of information technology services by investigating the sources of competitiveness of OSPs in India. Drawing from the experience of a selection of India's top 20 OSPs, the paper develops a conceptual model which posits that OSPs in India draw their competitiveness from having well-developed internal resources and capabilities such as human resource orientation, knowledge management and relational capital, together with clear growth strategies, while operating in an environment where the government plays a catalytic role in stimulating business growth.keywords International outsourcing, services offshoring, competitiveness, offshore service providers, information and technology services, IndiaTechnologically all offshore providers are about the same. We all use matching technologies and the same set of people since we recruit from the same colleges. So, where does the competitiveness come from? (Comment from an offshore IT service provider)

Global HR Roles and Factors Influencing Their Development: Evidence From Emerging Indian IT Services Multinationals

“…The industry's competitiveness mainly stems from the quantity and quality of intellectual capital, world‐class process orientation and quality standards, and an innovative global services delivery model that leverages a mix of onshore, near‐shore, offshore, and global service offerings (e.g., Issac, Rajendran, & Anantharaman, ; Patel & Budhwar, ). Chadee, Raman, and Michailova () found that human capital orientation in terms of recruiting, retaining, and developing talent supported by the top management with a global mind‐set is one of the key success factors for Indian offshore service providers. Another study highlighted the importance of management capability in effectively leveraging the intangible resources—namely, human, organizational, and relational capital leading to the successful performance of these firms (Lahiri, Kedia, & Mukherjee, ).…”

“…Chadee, Raman and Michailova (2011) found that human capital orientation in terms of recruiting, retaining and developing talent supported by the top management with a global mindset is one of the key success factors for Indian offshore service providers. Another study highlighted the importance of management capability in effectively leveraging the intangible 7 resources, namely human, organizational and relational capital leading to the successful performance of these firms (Lahiri, Kedia & Mukherjee, 2012).…”

External knowledge and performance of offshore IT service providers in India: the mediating role of talent management

“…Because of the institutional voids faced by firms from developing countries, they tend to rely on external formal and informal networks for knowledge acquisition and sharing (Peng, Wang and Jiang ). In the case of OSPs in India, developing and maintaining external networks have been found to be integral elements of competitiveness for the largest OSPs in the country (Chadee, Raman and Michailova ). However, external knowledge by itself does not necessarily translate into better performance unless it is properly assessed, analysed and utilised in a way which benefits the organisation.…”

Recalcitrant spoiler? Contesting dominant accounts of India’s role in global trade governance

“…Its IT-BPO sector is now a US$100 billion industry, with Indian firms supplying services to over half of all Fortune 500 companies. 29 As one of India's WTO negotiators stated, in the provision of IT-BPO services, 'no one else is as competitive as we are' . 30 India's competitiveness stems from its large pool of skilled, highly-educated, English-speaking workers available at relatively low wages: the typical salary for Indian software developers, for example, is US$5000-10,000, compared to US$50,000-80,000 in the US.…”