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.
