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Friday, July 04, 2008

The IT Examiner's quick guide to outsourcing

In recent years India has become an outsourcing Hub for the West, mainly because of lower costs and a good talent base available in the country.
The outsourcing services include customer care, BPO, medical transcription, telemarketing, market research , manufacturing, designing data management services, engineering services, financial services, creative services, web analytics services, healthcare services, ghost writing, digital image editing services, and software services.
So what exactly is outsourcing and why do companies do this, with India hogging the limelight? There are questions whether or not the economic slowdown will affect the outsourcing trend and even whether it will expand to other areas.
Outsourcing can be defined as a process in which a company delegates some of its in-house operations/processes to a third party. Thus, outsourcing is a contractual transaction through which one company buys services from another while keeping ownership and ultimate responsibility for the underlying processes. The clients inform their provider what they want and how they want the work performed. So the client can authorize the provider to operate as well as redesign basic processes in order to ensure even greater cost and efficiency benefits. Importance in outsourcing should be understood where the third party or partner company takes full responsibility of any part of operations undertaken.
When a company decides to concentrate on what it's best at, it decides to subcontract some of the process such as testing, manufacturing, development to a certain extent to a vendor company to reduce the overhead costs of the main company and make more efficient use of land, labour and resources for more important activities.
Source and more details

2 Comments:

  • At 1:13 PM, Blogger Ishani said…

    Outsourcing is truly becoming the buzzword of the day due to its multifarious advantages. Multitasking is almost becoming a dead concept. Companies are focussing on doing what best they can and offshoring the rest to trusted partners across the globe. The Asian connection in regards to outsourcing is gaining prominence with the western companies. This article at http://outsorcerer.com/blog/?p=41 on the latest trend in the European outsourcing market is an interesting one.

     
  • At 12:14 PM, Anonymous Anonymous said…

    Manoj,

    Great thoughts on helping people here in the United States understand the role of BPO. You said "...reduce the overhead costs of the main company and make more efficient use of land, labour and resources for more important activities." This is so critical - the functions that are outsourced - are those which can be performed competently for significantly less cost. That frees capital to maintain and create jobs that require domestic location or competence. In these economic times, this is an important message. Thanks for taking the time to write!

     

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