| 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. |
