Outsourcing
Articles >> Offshore Business Process
Outsourcing
Business process outsourcing can
either be near shore or offshore. For example, a company based in the US
can choose to outsource their non-core activities to a group based in
America. Or alternatively they can be provided the same services by
another firm in an offshore location, be it India or China. Due to the
effectiveness services and solutions, at very low costs, offshore
business process outsourcing has practically become the norm. Thus India
is a very popular location for offshore business process
outsourcing.
Lately however, the concept of offshore
business process outsourcing has been criticized. The negative
attitudes toward offshore outsourcing have been mostly by parties in the
US and UK, due to job losses in the mentioned countries. Yet not only
does offshore business process outsourcing have benefits for
the company it also has positive implications on a larger level.
Offshore business process outsourcing will ensure that companies can
pass the reduced costs to national consumers or to investors to
reinvest. New revenues will be created as outsourcing to a foreign
country will establish demand for the company’s national products,
especially in high-tech products. Although some national jobs may be
lost in the outsourcing process, other jobs will then be filled
generating additional value for the economy.
The global
market today is highly competitive and continuously changing. A company
must thus focus on improving productivity and at the same time cut down
costs. Therefore, a lot of processes that take up precious time and
resources are being outsourced. Offshore business process
outsourcing companies are often considered to provide more flexible,
faster, cheaper and effective services.
Offshore
business process outsourcing helps free up a company’s capital
and reduce costs. The operations or processes being outsourced vary from
manufacturing to customer service to software development and much more.
Most of the companies that are looking to outsource are multinationals,
or companies from western countries and most of the BPO units are in
countries such as India, China, Malaysia and even Russia.
Many companies claim that offshore business process outsourcing
has saved them anywhere between 40-50%. These figures are simply too
compelling to ignore in today's global economy. The development of the
world economy has not only enabled but also forced companies to make
more strategic business decisions. Moreover, thanks to outsourcing
companies are able to realize longer-term strategic goals in increasing
IT staffing flexibility. This combined with gaining access to an
expanding base of world-class IT skills means they can quickly respond
to new business opportunities. On the financial side, companies want to
cleanse their books of as many fixed IT costs as possible. Many
companies simply cannot afford not to outsource their business processes
to an offshore location. Any other decision would simply be too costly
and foolish business–wise.
