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Going beyond boundaries: Opportunities for Businesses to leverage Indian IT Skills

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Nov 10, 2023

Going beyond boundaries: Opportunities for Businesses to leverage Indian IT Skills

In this article, we explore the various aspects of how Australian businesses can effectively harness Indian IT skills for their offshore team.

How Businesses Can Leverage IT Skills from India

Australia has been increasingly recognising the vast potential of India's IT talent pool. With its strong and diverse workforce, India has become a hub for IT expertise, encompassing software development, cybersecurity, data analytics, and much more. This presents a significant opportunity for Australian businesses looking to enhance their technical capabilities and stay competitive in the global tech landscape.

The India Skill Report 2023 shows that the overall employability among young people has improved, increasing from 46.2 percent to 50.3 percent [1]. The "India's Graduate Skill Index: 2023" report reveals a promising employability rate of 48 percent among Indian graduates in AI and ML roles, underscoring the presence of a robust talent pool in cutting-edge technology.

Outsourcing & Trading Many Things – Why Not IT?

It's crucial to acknowledge that India's IT services are well-established and globally recognised for their quality. Australian companies should continue viewing IT outsourcing to India with the same confidence and enthusiasm that they approach trade in other sectors. The cost-effectiveness and the vast skillsets available in India make it a logical choice for businesses looking to extend their technical capacities.

There is a quantitative evidence of the IT outsourcing industry's growth, cost-effectiveness, and its prominent role in the global economy, reinforcing the content's message about the potential for Australian businesses to confidently embrace IT outsourcing to India. An annual growth rate (CAGR) of 17.92% [2] is anticipated for the period from 2023 to 2028, demonstrating the consistent expansion and opportunities in IT outsourcing.

Trust Building with Presence in Australia

Building trust is a cornerstone of successful collaborations. For offshore IT companies, to have a local presence in Australia is a vital step in establishing credibility and reliability. This local presence signifies a commitment to the Australian market and provides clients and partners with a direct point of contact. Furthermore, adhering to local regulations, ensuring compliance, and guaranteeing data security are integral components of trust-building when establishing an offshore team

Notably, Indian IT giants are poised to benefit significantly from the recent trade deal between India and Australia [3]. The importance of trust-building through local presence in Australia and provides a real-world example of how such collaborations and trade agreements can impact the IT industry.

Cost Factor as per India, Availability of Talents – Various Options

India's cost-effective skill market offers a substantial advantage for Australian companies. With nearly half of its 1.2 billion population in the working-age category, India boasts a vast and diverse talent pool, accommodating various skill sets. Whether a business needs software developers, data scientists, or IT support, India provides a wide array of talent options to cater to specific project requirements. The scalability of India's workforce allows Australian businesses to customise their offshore teams with flexibility [4].

This statistical data underscores the potential and diversity of India's labour market, making it a prime destination for Australian businesses seeking to enhance their technical capabilities and cost-effectiveness.

Proven IT Expertise

India's IT professionals are renowned for their expertise and proficiency. The country boasts a large English-speaking population, making communication with global clients seamless. According to Coursera's annual global skills report, India's technology proficiency levels have risen from 38% to 46%, demonstrating a significant improvement in IT skills. Indian IT experts excel in various domains, including software development, cybersecurity, and data analytics. This level of skill and professionalism positions India as an ideal destination for businesses to tap into for their IT requirements [5]

Outsourcing – Alternative Work Like Partnering

Outsourcing and partnering are two fundamentally different approaches for collaboration. When considering these approaches, it's essential to take into account the nature of the task, project duration, and alignment with a company's strategic objectives. Outsourcing, often characterised by its transactional and cost-effective nature, is typically employed for specific, short-term projects. In contrast, partnering involves the development of long-term, collaborative relationships with a focus on achieving shared goals.

In the context of IT services, the Australian IT Outsourcing market is on a growth trajectory expected annual growth rate (CAGR 2023-2028) of 11.31% [6]. This growth underlines the increasing demand for IT outsourcing services, making it a compelling option for businesses seeking to leverage offshore IT capabilities.

Latest Facts of Trade and Economy Between Australia and India

Australia and India continue to strengthen their trade and economic ties. Negotiations for the Comprehensive Economic Cooperation Agreement (CECA) hold significant promise for deepening this relationship. Bilateral trade encompasses a wide range of sectors, including technology and IT services, with a positive outlook for growth. In 2021, bilateral trade between the two countries amounted to $27.5 billion, and India is aiming to double this figure to $50 billion within the next five years under the Economic Cooperation and Trade Agreement (ECTA). This presents Australian businesses with valuable opportunities to leverage India's IT capabilities for mutual benefit [7].

Australian businesses have a remarkable opportunity to harness India's IT skills for their extended technical teams. By embracing the strengths of India's IT workforce, building trust, and confidently approaching IT outsourcing to India, Australian companies can not only achieve their technical objectives but also contribute to the growth and success of the Australia-India relationship in the dynamic world of technology.

India is the third largest and fastest-growing hub for technology startups, with over 1300 startups established in 2022 also notably 23 startups in 2022 achieved unicorn status making India the second-highest source of unicorn additions. The IT sector contributes 7.5 percent to India’s GDP and serves as a hub for IT and software companies worldwide. India's IT industry revenue reached USD 227 billion in FY 2022, with a 15.5 percent year-on-year growth. By 2025, the GDP contribution of India’s IT sector is estimated to reach 10 percent [8].

Australian companies should not hesitate to explore this avenue, as it offers a plethora of benefits and advantages in an ever-evolving technological landscape.