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Despite strong Global competition, India is still reigning at the top of the Outsourcing universe. The recent expansion plans of IT firm Virtusa is an example. Although, Sri Lanka is amongst one of the several countries touted to be a competitor for India's crown, as the all time favourite off-shoring / outsourcing IT / ITeS / BPO destination, Virtusa, which was founded there seem to be expanding faster in India. By many measures, Sri Lanka should have been a better place for the growth of an IT company, as not only does the island country have more modest salary levels, its employee retention rate is higher, while initial investment for a development centre is lower.
However, Virtusa, founded in Sri Lanka is investing $22-million to set up a campus style facility in Hyderabad, and confirms its Chennai centre will see the fastest headcount growth, in the next one year. And, if you ask the question, why India and not Sri Lanka, the answer lies in scalability.
Marc Hebert, CMO - Virtusa says, their Sri Lankan centre is 20 to 30% cheaper than its Indian operations, both in terms of initial investments and operational costs, attrition rate is less than 10% compared to above 12% in India, but the problem is, Virtusa cannot scale up in Sri Lanka. With a headcount of 800, Virtusa is already Sri Lanka's largest IT firm, and its current year recruitment would take up 20% of IT graduates the country produces. "In Sri Lanka, we are thinking of taking in students from other streams and training them in IT." says Hebert.
For manpower expansion, Virtusa looks to India, where its two centres, one in Hyderabad employs 1,300 people and Chennai with 400 on its pay roll. The issue is entirely different in India, where a medium-sized company with an employee count of 2,500, competes with the likes of Wipro, TCS and Infosys, who have 18-times more employees and command stronger brands.
Virtusa, says Mr. Hebert, has to manage competition for skills and talent by offering advantages such as faster growth opportunities and better access to top management and customers. Employing 2,500 in its three centres, while the Hyderabad and Colombo facilities have been used to full capacity, Chennai has room for an additional 800 more.
Sometime ago, India's burgeoning population was looked upon as a huge drawback. Today, that same drawback of population explosion has donned a new avatar turning into its saviour. A saviour, that has helped change India's image of a poverty stricken country, into a country that is the knowledge hub of the world, a country that the world looks to provide high quality, cost effective solutions to its problems, such as elderly care outsourcing, medical off-shoring, and much, much more. India, with its one-billion plus population has enough skilled manpower to provide healthcare, care for the elderly, for IT / ITeS / BPO, and a diverse range of other fields. In terms of sheer scalability, the Indian sub-continent provides the best scenario of all. And, that is why, while competition it may have, India will continue to retain its off-shoring / outsourcing edge.
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