India, being a country of cost-efficient niche skilled talent in IT and innovation hubs has been the go-to destination for firms looking to set up ODCs.

Key Takeaways:

• Organisations look to cost-efficient niche IT skilled talent to handle their core business function of Software & IT.
• India offers heightened cost-efficiency in terms of talent and infrastructure, making it a very viable destination for foreign firms. 
• Searching for niche IT skill expertise? India’s got you covered with top-tier tech talent!
• Stagnancy isn’t an option in ODC services and India has ensured innovation in technologies is carried out regularly to give firms a competitive edge.
• Scalability & flexibility are key in adapting to the changing tech requirements of parent firms. 

Introduction

One can find in the contemporary business landscape a trend! What trend? A trend where business organisations intend to expand their outsourcing vertical by as much as 81% in next few years as per a recent Deloitte analytical report. Offshore development centers (ODCs), which back in the day served in helping out back-office IT tasks, have evolved into handling the core Software & IT functions of a firm. 

This core function has in the recent years, required extreme niche IT skill expertise, something that is found aplenty in a country like India. While the niche IT skill expertise might be rare in the firm’s home country, however, even if sufficient, demands a lot of shelling of the company’s resources to acquire their services. As a result, many companies have turned their eyes to India to address this challenge. The following article would assess how Indian ODCs have turned into a paradise of cost-efficient Niche IT skillsets. 

Cost-Efficiency at its Peak

India, as a nation has been a major contributor to the ODC landscape over the past couple of years, since it promises heightened cost-efficiency compared to many other competitor countries. This is ascertained by the fact that the labour rates of India is 40–60% lower than that of North America or Europe. Moreover, the overhead charges in terms of office spaces and infrastructure charges are relatively lower in India compared to other countries. 

Most organisations report an overall 10-35% annual IT budget reduction by their offshoring activities to India. These savings in turn, serve organisations to invest on a greater scale in R&D and digital initiatives, something which is very vital in the fast-paced world we live in. However, one is to note that these massive savings doesn’t mean inferior work quality in any way. In fact, India’s outsourcing ecosystem boasts of having almost all the in-demand niche IT skilled talent ranging across varying years of experience, a topic that will be discussed in the next point. 

Powerhouse of Niche IT Skilled Talent

While India produces a record 1.5 to 2 million STEM graduates every year, its IT industry employs over 5 million techies yearly. These techies in fact, by general standard itself possess technologies like artificial intelligence, machine learning, blockchain, cloud-native applications, IoT, and cybersecurity in their CVs – all of which are vital for product innovation and maintaining competitiveness in the market. 

Besides, if there is a need posed by the foreign firm for knowledge of a niche software language, platform or skill, firms have a greater chance of finding such talent in India and even if they aren’t they can sponsor the training of capable individuals in a cost-efficient manner. By reports, the demand for these niche IT skilled talent is exploding by each passing day. As per a Deloitte–NASSCOM report, India’s AI-related talent demand is projected to double by 2027 (from 600,000 to 1.25 million professionals). It’s no wonder that a major part of these demands are from foreign companies who are offshoring their IT-centered roles with Indian professionals. 

This demand for niche skill expertise is quite all-encompassing in nature since it can range from blockchain development and AI automation to industry-specific technical competencies. For example, offshore teams could offer blockchain developers with extensive experience specialising in smart contract development, decentralised applications, and custom blockchain solutions. In the similar way, renewable energy sectors require specialised skills in turbine maintenance and understanding of environmental legislation, while oil and gas industries would require technical expertise in drilling and strict safety protocols. Hence, it becomes clear that the strategic value of ODCs currently lies in niche skill expertise.  

Innovation – A Serious Priority

Many Indian ODCs have taken it as a serious priority to innovate by establishing Centres of Excellence (CoEs) that focus on emerging and upcoming domains. In a bid to maintain a competitive edge, they ensure to partner with academic institutions like cloud providers or AI research labs and thereby become masters at it. 

This process of constant upskilling has resulted in multiple firms like Wipro and Genpact dedicating regular hours each week to learn AI/ML, besides other in-demand niche tech skills. Reskilling, in the process, benefits both the company and even the individual since as per surveys, 60–71% of Indian workers recognise that learning AI skills boosts their careers to a large extent. 

Apart from hiring specialised tech workers or training existing employees, ODC providers also adopt necessary agile methodologies that contribute towards rapid skill rotation. This means that software developers could spend part of their day on core product code and another part on innovation-related tasks. 

This, in turn, benefits the foreign firms since they can tap into a “pre-trained” pool for strategic projects. In fact, this is backed by data since according to a Deloitte report, nearly 98% of outsourcing clients now expect AI/GenAI capabilities from their service providers, with many even going to the extent of writing AI performance clauses into their contracts. Thus, firms are no longer content with allotting standardised maintenance work to India, but rather allot high-value R&D and innovative product-development tasks. 

Conclusion 

In conclusion, Indian ODC’s have emerged as strategic pillars of many world oragnisations, thanks to its cost-efficiency, niche technical expertise, and ever-growing innovation. With the global offshore development market projected to grow at a compound annual growth rate of 12.23% between 2024 and 2031, every organisation needs to understand how to effectively choose the right ODC to support the specialised competencies they’re looking for. On the other end, ODCs will have to implement the crucial element of scalability and flexibility to their services since it enables to sow confidence into foreign firms who would have dynamic technological requirements and market conditions, thereby necessitating a continued access to niche skilled talent base.