USD vs INR: How the Currency Gap Makes India the Smartest Outsourcing Decision

The voice of money is really loud! While the voice of currency relies on a whisper! But, now the voice of the US Dollar vs. the Indian Rupee has become a very strong advantage for the business owner’s ability to leverage the exchange rate.

Outsourcing data entry, as a global company, will now have more opportunity than just talent and scalability to take to the job. In addition, the dollars and rupees have a different daily exchange rate, therefore giving businesses an opportunity for ordinary budgets to turn into very high-performance jobs that you couldn’t do in the US. This also applies to Europe, the UK, Australia, etc.

Understanding the USD to INR Exchange Rate Advantage

In order to understand how the exchange rate provides the foundation and the funds to support one of the smartest decisions a business can make when business process outsourcing, you need to understand the differences between the Value of the dollar (USD) vs. Value of the INR.

An Exchange Rate is not just a finance concept, but it is a real measure of the actual purchasing power of a currency.

Simply stated: When a U.S. company pays their vendors in U.S. Dollars, but the service provider they are paying is in Rupees, the value of that exchange is multiplied many times over. Also, the stronger dollar has a greater stretching effect on the rupee because all operating expenses are also paid for using rupee currency (i.e., salaries, office costs, utilities, etc.).

For businesses using data entry services from India they see:

Production levels are greater than they would be domestically with the same budget for same amount of employees.

• There are more employees for the same overall operating cost.
• With the same overall operating cost for service providers to hire management and quality assurance, as well as transferring product, they don't have to charge you for each item separately; instead they agree to bundle these items together at the same price.
• The overall cost associated with the same tasks that would be performed in the U.S. is significantly lower to outsource these functions.

Outsourcing is not based on paying less, but rather on the economic balance between the two very different markets with different currency values and relative standards of living for each country.

Why is it that Indian professionals make less, but are not less quality?

The average wage in India is much lower than the U.S. society and so most assume that because of this, the quality of work is less than the quality of work performed in the U.S. This would be a FALSE assumption! The overall cost of living, housing, transportation, and services is considerably lower than in Western countries. As such, compensation levels in dollars will be perceived as low but competitive within the country.

At the same time, India has a wealth of resources available to support growth, specifically:

Data entry operatives employed by India data entry companies have been professionally trained to meet global quality standards and documentation procedures, as well as comply with data security measures.

For businesses that outsource their data entry jobs, there are multiple advantages, including but not limited to:

An assurance of quality and controlled costs increases value.

Regarding Data Entry Operations:

Data processing is inefficient in terms of both process and volume. Outsourcing to India would contribute significantly to the efficiency of data processing.

By outsourcing data entry operations in India, businesses can expect to receive:

The ability for Indian companies to provide supervision, technology, and reporting systems without inflating prices to level pricing equal to other nations creates the opportunity for Indian businesses to deliver their services professionally at a much lower cost than Western companies.

How businesses in Europe will benefit even further from the favorable EUR to INR exchange rate:

The exchange rate has an even greater benefit for Europe than for businesses in the US, since the exchange rate between the Euro and the Canada is usually at a higher level than for the US dollar. Thus, because currency exchange rates are fixed, European companies have a greater purchasing power when converting to Indian rupees.

This means:

For companies based in Germany, France and the Netherlands, as well as Spain and other nations within the EU, outsourcing data entry India dramatically increases the size of operational budgets.

The strength of a currency has the potential to become a quiet engine for growth. But Exchange rate fluctuations: should you be concerned about exchange rate fluctuations?

Exchange rates will change. The market regularly fluctuates from bait-and-switch; one day, you’ll see quotes of $1=£.80 when in fact the USD is worth $2.00 against the GBP.

Outsourcing decisions are generally unaffected by short-term fluctuations in foreign exchange:

Long-term growth rates are far more significant

Outsourcing is a strategic partnership; it’s not merely a transaction. Small fluctuations in exchange rates do not erase the cost benefit associated with using an outsourced provider.

Pricing Buffers Exist

Vendors price contracts knowing that slight fluctuations in their respective currencies will take place over the course of the contract period.

Operational Savings Outweigh Swings

With modest movement, the total cost of providing an off-shore service will continue to be considerably less expensive than providing it in a company’s home country.

Multi-Year Contracts Provide Protection

Long-term contracts negate many of the risks associated with currency movement because they fix pricing structures for an extended period of time.

The impact of currency movement on outsourcing decisions should be considered, but should not cause you to seek other options for achieving operational efficiencies.

Real-World Examples of Budget Efficiency

To illustrate my point, imagine that you are a company paying $2,000.00 per month for back-office operations:

Domestic option –

Off-shore option with data entry services from an Indian outsourcing provider –

Both solutions cost the same – massive operational differences.

The above illustrates how currency is leveraged as a competitive advantage.

Gain Long-Term Savings Through Sustainable Improvement with Outsourcing Partners

Short contracts allow you to save money, but longer-term contracts allow you to build process improvement efficiencies.

By developing a long-term relationship with an outsourcing partner, companies can realize:

Predictable Costs – A predictable cost structure allows you to better plan your finances and operate from a stable monthly billing cycle.

Familiarity with Processes – In building a long-term relationship with your outsourcing provider, teams will understand your processes, systems and expectations.

Greater Accuracy over Time – As teams gain experience with your company, their accuracy will increase while their speed will improve.

Scalable Operations – You can scale up or down based on the seasonality of your business.

Stronger Data Security – Your outsourcing provider has invested in processes and procedures that comply with existing regulatory requirements.

The best-in-class data entry outsourcing partners are not temporary vendors; they are part of your extended support team.

Why India is the Best Place to Outsource

India possesses multiple competitive advantages as an outsourcing location:

For many reasons, India data entry providers offer global companies with a practical and strategic outsourcing solution.

In Summary

While the currency difference may be too technical for you to understand, it can impact a growing business’s overall success.

The weakening or strengthening of the USD relative to the INR coupled with the EUR relative to the INR has turned the use of outsourcing to save money into a long-term business growth activity. Companies located outside the United States gain improved operational power, financial flexibility and operational process efficiency as a result.

As a result, businesses of all sizes continue to use India data entry outsourcing services to support their back-office operations.

Smart economics, skilled labour, scalable delivery — a decision that makes sense based on the numbers and is validated by the results.