Top Ten Domains in Outsourcing

Today outsourcing is not just about call centres; it encompasses front end, back end and several tasks in between too. Outsourcing was earlier only associated with call centres where agents chased payments or cross-sold services and products. However, India is emerging as a well-rounded hub for outsourcing across the value chain. Some of the hot new domains are mentioned below.

1. Engineering Services Outsourcing (ESO): NASSCOM and Booz Allen Hamilton in a joint study identified Engineering Services Outsourcing or ESO as a huge opportunity. Reportedly pegged at US$ 40 billion, the domain is expected to generate jobs for around 2,50,000 engineers in India. India currently has 12% of the market and is expected corner up to 30% by 2020. Currently, captive outfits have around 55% per cent of Indian market. However, there is room for the third party vendors to grow as well. In the past, ESO in India was limited to 2D conversion to 3D, by digitizing technical drawing boards. However, the industry is steadily moving up the value chain. For customers who outsource engineering services, cost savings would be the primary concern. However, there are other gains like access to a huge talent pool, access to an emerging market and decreasing time to market in an industry where obsolescence rules.

2. Design Outsourcing: Design Outsourcing is big business with Indian designers and design houses working on designs for new product lines of global majors like Whirlpool and Reckitt Benckiser. MNCs like GE, LG, Philips and Bosch are setting up research and design centres in India. Some of these products are designed for the Indian consumers, but a major chunk of work is being done for customers across the globe. This domain includes not just packaging and graphic design work but also some high-end product design work. Leading the pack are the consumer electronics giants and FMCGs for whom it is vital not only to gain and apply local consumer knowledge, but also reduce time to market. So Indian designers whip up new designs or add new features to modify existing designs for these firms. Cost benefits are enormous with costs of design in India (per hourly rate) being as low as US$ 60 as opposed to US$ 800 in Europe. Besides, there are other benefits like the time difference, ensuring a 24x7 workday, access to a high level of design skills and reduction in time to market.

3. Aerospace Outsourcing: The Aerospace vertical has begun to be noticed as having potential for outsourcing. Boeing plans to set up a captive unit in Nagpur in the state of Maharashtra in India as its maintenance, repair and overhaul (MRO) base for Asia. Lockheed Martin is another firm that is looking to forge tie-ups with Indian firms. These deals are expected to create thousands of jobs in India for a range of specific skills.

4. Enterprise Content Management (ECM): Enterprise content management (ECM) has emerged as a key domain with potential for Indian outsourcing firms. The market is seeing some changes with technologies converging to find innovative solutions that help firms access information in the format they require. ECM helps firms align information to business goals, conform to compliance-related data storage and deal with both structured and unstructured content.

5. Education: Education outsourcing is yet another domain that has a lot of potential. For one, tutors for competitive examinations are an extremely sought after lot in India. Other education processes that are outsourced to India include designing the curriculum, developing educational content and actual delivery of the education.

6. Animation: Animation outsourcing has been in the news as a hot domain as Hollywood took to outsourcing more and more of its computer-aided animation work. Earlier, this involved merely filling in colors onto frames. But, now Indian talent is being utilised from more complex work. Again, the initial benefit was cost. Players like Walt Disney Pictures, Cartoon Network Enterprises and Sony Entertainment initially used inexpensive Indian computer programmers and animators and saved nearly 50% on animation expenses. Today, benefits also include the time factor and sheer creative talent. Today, Indian animators and animation firms are working with more than 40 U.S. television series.

7. Medical Outsourcing: Medical outsourcing in India started with the inflow of medical transcription work. The transcription industry is booming. Today, the medical outsourcing industry includes other medical processes like analysis of laboratory tests and radiology reports. Other healthcare related processes that are outsourced include billing, claims management and data management. Indian outsourcing companies are also engaged in research, conducting clinical trials for global drug majors like Novartis, Pfizer and Eli Lilly. India is a natural choice as it has a huge patient pool. Clinical research in India was again spawned for cost benefits but today the focus is shifting to quality and speedy response. There is an increased awareness of Good Clinical Practices (GCP) in India. It is estimated that the current outsourced clinical trial activity in India is around US$ 75 million. This is expected to go up to US$ 281 million by 2010

8. Legal Process Outsourcing (LPO): LPO is big business generating US$ 61 million in revenues. This is expected to grow to US$ 605 million by 2010. One study estimates that this domain is likely to generate 79,000 jobs by 2015. Indian lawyers working for these firms typically do what paralegals would do in US. The range of services includes low-end services like legal transcription, document coding and docketing. High-end services include prior art searches, drafting patent documents and conducting due diligence. The industry is largely driven by the sheer number of law graduates the country generates and the fact that it has a legal system that is similar to the one in the USA or the UK. Captive outfits have the lion’s share of high-end work on account of their confidential nature.

9. Sales Enablement Outsourcing (SEO): This is a vertical that is relatively unexplored yet but some of the big players in the Indian outsourcing industry are eying this area for expansion. Sales support with research, graphics and data management in terms of order fulfilment and order tracking would help firms manage customer relationships better.

10. Hospital Management: Hospital Management is the very latest domain to be added on to the Outsourcing bandwagon. This includes managing information and data, recruitment of doctors and nurses, putting in and working with IT systems, procuring medical equipment etc. Outsourcing firms also handle the front end of the process with managing the reception and patient documentation.