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Archive for July, 2011|Monthly archive page

Offshoring may not remain a low cost option after all…

In Uncategorized on July 9, 2011 at 3:15 am

Many a time I wonder as to why, developed countries offshore to countries which do not have good infrastructure.  The answers range from availability of talent (preferably English speaking, and low costs).   However, low cost may not remain an advantage after some time.  Consider this, the infrastructure in developed countries is superior.  The roads, essential supplies like water, electricity are well regulated.  I believe all efforts to sustain this plus having a legal system that is not corruptible, comes at a cost which can be overwhelming at times.  This is where some developing countries have an advantage only as far as cost is concerned.  Yes, you may argue that China has got good infrastructure, and remains a low cost option.  This may not be true for a long time.  Unfortunately, although India has poor infrastructure in terms of essential services as compared to developed countries.  We are way ahead in this world in terms of availability of talent (English speaking. This is our trump card).  Sooner or later rising inflation may bring out wage hikes leading to higher billing rates thereby diluting the low cost argument which works to our advantage.  Low cost is completely unsustainable over a period of time.

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