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.
