Growth of Outsourced IT-Enabled Services in India: A Systems Dynamics Approach

Abstract

IT-enabled services (ITES) in India have registered tremendous growth in recent years. Availability of English speaking trained manpower and low wages are some of the factors that have contributed to the growth of ITES sector in India. However, recent political movements against outsourcing, quality concerns of the clients, and data theft have had negative effects retarding the growth of this sector. In this chapter we review all the techno-economic factors that positively and negatively affect the growth of the ITES sector. An exhaustive literature survey is done to elicit these factors. We develop a generic causal model indicating the relationships between the various factors and the growth of ITES revenue. We discuss the factors of advantages and disadvantages India has in this sector. We draw some broad conclusions as to how the stakeholders such as policy making bodies and the industry associations can use this model to study the effects of these factors on the growth of the industry.