Intercultural communication training in it outsourcing companies in india a case study


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Cultural difference in business - Valerie Hoeks - TEDxHaarlem

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Outsourcing offers several potentials to companies.

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According to a research survey of Getronics who questioned IT executives in the US and six European countries in , the main reasons for outsourcing is cost reduction and cost structure changes see Figure 1. Outsourcing allows companies to reduce their costs because subcontractors produce or offer services to a lower price due to economies of scale or low cost environments.

Besides, fixed costs, i. Furthermore, as it is necessary to calculate costs before the decision making whether and what to outsource or not, companies gain the chance to get an overview and transparency over their costs because hidden costs will be shown as well. This can also result in a higher cost consciousness among employees for the future. However, these percentages are dependent on the particular situation of each company and should not be generalised.

In the study of Getronics in , managers mention the concentration on core business as the second most important point after cost reduction when it comes to the potentials of outsourcing. As in many companies IT is not counted as a core competency, it explains the trend to outsource IT to subcontractors. Another potential, especially for smaller companies, is the access to special know-how and expertise as well as to new resources Meissonier, Know-how needs to be built up and developed continuously.

An IT service provider specialises in a certain IT area and offers services to several companies. In line with the motives mentioned above, the splitting of risks is another potential for companies who decides to outsource its research and development activities to an external entity.

This form of outsourcing holds the same logic of risk spreading than it is usual in other partnerships, meaning that taking the risk is rewarded by the company by granting the external a percentage of the future profit the new product may bring Meissonier, However, outsourcing does not only offer potentials to companies, but includes several risks as well. Dependence is one of the main risks companies fear when it comes to the debate on whether to outsource or not. If a company outsources its IT services to a subcontractor, it does not only transfer processes but often personnel as well.

As a result, the company will become dependent to the external service because it loses certain know-how and usage of IT systems within the company Meissonier, This creates an even bigger problem if the company decides after a certain period to reintegrate its IT services again. Another aspect that is feared as risky is the transfer of confidential and business critical information to the external partner. The risk is seen in the unconscious or willingly conscious information transfer to competitors. This risk can be limited by including entitlement to damages into the outsourcing contract.


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Furthermore, performance and quality deficits are part of the risks a company has when outsourcing. In order to profit from cost reductions and performance improvement, outsourcing provider must often standardise its IT service offerings. Again, this can be defined in the outsourcing contract.

The risk of cost increase can be limited by a detailed calculation of involved costs before the outsourcing agreement is signed. There is a risk of personnel as well. Employees usually face important changes if a company decides to outsource. Those changes include job assignments, new employer, or changes of responsibility.

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To limit the risk, it is important to include the employees early in the development of the outsourcing plans and communicate openly with them. Only if they understand, that it is not a threat for them but holds opportunities for the company, and therefore for themselves as well, they will accept and support the project.

When it comes to singling out the most popular destination for IT offshore-outsourcing, one country stands out of the crowd: India! About Fortune companies 5 use Indian outsourcing services or offshore to the subcontinent Schaaf In the following, a country portrait will be given and the major factors of the Indian success story will be investigated. Located in Southern Asia, India is a country of records and of striking differences.

With an area of 3. Therefore, it is not surprising that the Indian population varies a lot in culture and language from north to south, and from east to west. English is also an official language and the only language which is spoken throughout the whole country, and is consequently very important for business and communication between the various Indian regions, cultures and ethnical groups as well as with the rest of the world.

India has a long history including changing occupations of the country, it gained its independence on 15 August from the British. New Delhi became the capital of the republic.

The Impact of Intercultural Communication on the Success of French Offshoring Projects to India

After a period of foreign rule and several decades during which the Indian economy was virtually closed, the republic has emerged as a major economic power and the current government under Prime Minister Manmohan Singh continues to lower economic deregulation like controls on foreign trade, high tariffs or the privatisation of government-owned industries in order to attract foreign investors.

In , the gross domestic product growth amounted to 7.

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Despite the success in the service industry, India faces huge social, economic and environmental problems due to the fast growing population, poverty, illiteracy, pollution and ongoing political conflicts with neighbouring countries. However, with a well-educated English speaking work force, India became a major exporter of software services and software workers.

For example, an estimated 30 percent of software engineers in the US Silicon Valley were of Indian origin during the IT boom of the late s Kolanad, In the following subchapter, the development of the Indian IT industry is presented in more detail. India emerged as a software service exporter in the late s and early s with the country's transition from centralised planning to a market-oriented economy.

This development was facilitated as a result of several important political changes. In , the Indian Prime Minister, Rajiv Gandhi, started to lead its country away from technology autarchy, import subventions and export pessimism. The IT industry got recognised as its own industry sector and import custom duties for computer and software were decreased by 40 percent Schaaf, The politic isolated the Indian hardware industry and as a result shifted the focus on the software sector.

When IBM left India in because the company was no longer willing to bear the imposed and almost unbearable regulations, Indian companies started to use mini computers which worked with the operating system UNIX. A few years later, UNIX gained worldwide importance and the Indians used successfully their knowledge head start Murthy, Another important fact for the economical success was the stipulation of the software industry which started in the late s.

An autonomous organisation started to build software technology parks which offer a high quality infrastructure like constant energy supply, telecommunications, and satellite connection. As the rest of the country suffered from power cuts and other lacking infrastructure, these parks became high technology oases. Additionally, the settlement of companies in the technology parks is encouraged and promoted by no tax requirements and no limitations for foreign companies Schaaf, As a result, in , 40 software technology parks existed throughout the country with 4, companies settled there of whom three quarter export software products.

Moreover, general economic reforms in enforced the rise of the software industry because the path for foreign direct investment was laid open and a lot of transnational companies took the chance and opened subsidiaries in India. However, the rise of the Indian IT industry is not only due to changes in the Indian business environment. The global IT industry was increasingly gaining more and more importance in the s resulting in a high demand of skilled IT experts like programmers and software architects. In order to overcome their shortage of IT specialists, the United States, which was the biggest IT market at that time, decided on the one hand to give special visas to Indian IT qualified employees.

On the other hand, American companies started to offshore IT projects to Indian companies or to open their own subsidiary in the country Schaaf, Another milestone in the global development was the technological problem of the millennium year In search for the millennium bug, Indian companies became known worldwide as cost saving, competent and reliable business partners Schaaf, In the literature, the country is therefore often called the largest back office in the world.

Intercultural communication competencies in the Indian Information Technology industry

The main services that are offered by Indian companies are system integration, software application packets like MS Office, product design of company software like Enterprise Resource Planning and Customer Relationship Management, and development and maintenance of applications as well as hosting services.

BPO is a special kind of outsourcing which means that a company transfers a whole business unit to an external service provider. Examples for BPO are customer services like call centres and e-mail support, telephone marketing, personnel administration, salary statements and accounting Pohl, , Schaaf, North America is the dominant region when it comes to Indian software exports.

Over the last years India could stand its ground on top of the offshoring service providing countries, ahead of China and the Philippines - its main competitors. India has a huge population and a high population growth of about 1. In , around 31 percent of the Indian population was younger than 14 years old and only around five percent was above the pension age of 65 CIA, This highly mobile, hard working and technologically strong as well as computer literate population plays a major role in making India the most sought after outsourcing and offshoring destination.

India offers a competitive low cost work force along with extremely low set up costs and services to avail, owing to the wide difference between the personal costs in India and that of developed countries. Even if one adds the additional costs due to offshoring into the calculation, India stays ahead in the cost comparison. Due to the development of high speed internet connection, this technology offers the end-user to call long distances for a very low price compared to telephones.

Very large multinationals have budgets that exceed those of many countries and can therefore have a powerful influence in international relations because of their large economic and, hence, political influence as well as their extensive financial resources Wikipedia, It is a reference of the largest public American companies classified by gross revenues alone Wikipedia, The list is used for business analysis and trend forecasts. Yeah, it is true that competition in intellectual are now in the business world.

intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
intercultural communication training in it outsourcing companies in india a case study Intercultural communication training in it outsourcing companies in india a case study
Intercultural communication training in it outsourcing companies in india a case study

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