The primary reason for outsourcing is the cost effectiveness factor. India has proved to be one of the most cost effective outsourcing locations in the world. However, it does not stop there. Besides being cost effective, India has also produced quality certified software solutions for the world. It has more ISO 9000 certified software companies than any other country in the world. India also holds the distinction for having three out of four SEI-CMM 5 companies in the world. The fact that India exports software products to more than 95 countries seems to justify these certifications. India is the favorite outsourcing location of 82 percent of the US software export market (Nasscom).

Since its basic education system is geared toward mathematics and science at early levels, Indians is able to provide rich technical expertise. Many of the educational and training institutes of India have an international reputation for quality education and offer some of the best programs in the world.

A couple of other factors making India a favorite IT outsourcing location are that India has a stable political environment and pro-IT government. It also has reliable satellite and submarine communication links that facilitate good broadband connectivity with the rest of the world. These technological factors have enabled businesses in India to work at a quick pace with a short turnaround time. India and the US have a 12 hour time zone difference. This facilitates 24-hour customer service availability for some of the outsourced businesses.

Since Indians are proficient in English and possess intercultural understanding, the language and cultural barriers faced while outsourcing to other countries are non-existent. India, therefore, continues to be the world’s favorite outsourcing location and IT heavyweights like Microsoft, Intel, Cisco, Oracle, Dell, and Compaq have already made huge inroads here.