Outsourcing: A Mantra For Superior Quality At Low Cost

By Author: Vijay K Shetty
Total Articles: 2542
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The increasing practice of offshore outsourcing by companies is not a new phenomenon. The basic assumption that we all have is that such a decision is taken as a measure of cost reduction. Let's understand the reason behind companies resorting to this option.

What is offshore outsourcing? It is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured.

This can be of four types - Information Technology Outsourcing (ITO), Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO) and Offshore Software Development. Companies usually adopt this when there is a huge wage difference between the home and offshore country, the job can be telework and requires high degree of information can be transmitted over the internet and is repetitive.

While the driving force behind offshore outsourcing has been cost-cutting, the backbone of this has been the use of internet to connect the globe together. So what are the benefits that can be derived by making use of offshore outsourcing? ...
... The use of internet has made it possible to connect to freelancers across the globe, who are willing to complete projects at lower costs. The main benefits are reduction of labor costs, operational costs, better expertise and the ability to provide services to their customers at a lower price due to availability of cheap labor in the country where work is outsourced.

Some of the countries offered offshore outsourcing jobs include India, Mexico, Ukraine, Indonesia, Philippines, Egypt, Mauritius, Malaysia and many more. There are certain strategic advantages of offshore outsourcing like flexibility of work, cost reduction, better focus on core business and use of improved technology.

India has huge earnings from outsourcing offers, and they are preferred not only because of cost reduction, but because they also help in value addition and increase efficiency for the client. Of course, there are certain critics who believe that outsourcing creates loss of job opportunities in the domestic market, does not motivate the local workers and reduces domestic investment. Countries like the US and UK have been severely affected due to outsourcing. India has emerged as a global brand in terms if superior quality and hence is motivated to take up outsourcing jobs.

The fact remains that, if companies can oversee that the investment made to outsource jobs to relatively cheaper countries, is comparatively insignificant to the revenues and efficiency with which their work gets completed, they wouldn't mind making that investment.

Vijay K Shetty, Platinum Level Author.

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