Outsourcing
Articles >> Offshore Outsourcing
The rise of offshore outsourcing took place several years
ago. Countries such as India and China are popular offshore outsourcing
locations because they offer cost effective solutions.
Outsourcing can either be local 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
outsourcing has practically become the norm. Thus India is a
very popular location for offshore outsourcing.
Lately
however, the concept of offshore 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.
Why then are companies outsourcing to offshore
destinations and why should they continue to do so?
Cost is
naturally one of the main reasons for offshore outsourcing to
India for example, but there is value addition in terms of quality and
time-to-market benefits. Also the expertise, talent and creativity of
offshore outsourcing companies play an important role in the
decision to outsource. Companies in India for example are continuously
competing for business from companies that need outsourcing. This
results in constant development and enhancement of services, technology
and quality.
Many companies claim that offshore
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 to an offshore location.
Any other decision would simply be too costly and foolish business–wise.
