Why are US banks opening captive centres in India instead of outsourcing technology related work to traditional IT companies? How long this trend will survive in India?

Most multinationals, Global 2000, and Fortune 500 organizations have been pursuing a multi-sourcing strategy. They continue to outsource work to established IT companies while they also selectively insource work to their own captive development centers. A couple of reasons for this:

• Managing a captive outsourcing center and sourcing some work to vendors helps companies de-risk their sourcing strategy.
• This is one strategy to reduce the travel of vendor workers to onsite locations. Clients are increasingly expecting their vendors to work with their teams in their captive centers.

This trend of establishing captive centers is likely to continue to grow in the near future.