Global Outsourcing
Even though there has been a lot of political debate on the subject,
global outsourcing has become a fact of life and is growing
rapidly. This is because, despite all the criticism and skepticism,
global outsourcing can provide huge benefits in terms of cutting
costs, productivity, management, and profits. Global outsourcing
can be seen as a natural development of existing outsourcing
practices in the global economy today. In fact global outsourcing is
becoming a necessary business solution in order for companies to
maintain market share and profitability. Global outsourcing is also
considered the practice of using multiple offshore locations.
Global outsourcing thus balances the supply of specific talent
while minimizing geopolitical risk.
It can thus be stated that global outsourcing is a real and
inevitable part of the global markets today, and should be
considered for its desirable benefits. Global outsourcing
creates and expands new markets. It also effectively and efficiently
promotes global citizenship. Not only does global outsourcing
recognize the benefits of a global economy, but it also enhances
technological innovation and diversity.
In addition global outsourcing has both benefits for one company as
well as positive implications on a larger level. Global
outsourcing will ensure that companies can pass the reduced
costs to national consumers or for investors to reinvest. New
revenues will be created as global outsourcing will establish demand
for 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. Thus there is a misconception in current discussion on
global outsourcing, because to problem is neither trade nor
globalization at such, but more specifically how a country allocates
its benefits from international trade.
Of course global outsourcing is not the easiest business
decision for companies. There are large cost variations from country
to country. Companies must take into consideration the risks
involved that can include geopolitical, economic, legal, cultural,
infrastructure and competency risks. But then these are risks that
have to be into account when embarking on any international
operation. The movement towards global outsourcing is more
complicated than just acquiring skill and resources in a low-cost
country. The main reasons emerging now are quality and speed to
market. Global outsourcing also provides companies with
flexibility in needs and the possibility to shut down the outsourced
operation when it is no longer needed.
Global outsourcing is said to be driving the world past the
information economy towards a global knowledge-based economy. The
technology today enables knowledge to be shared throughout the
developed and developing world, resulting in a range of regional
specializations to emerge.
