Outsourcing is defined as assignment of tasks and/or processes to an external outfit, whether an individual or another company. Offshoring is moving on of tasks to a company in another country.
The concept of Outsourcing and offshoring is not new and has actually been around for a very long time. Present times can be coined as the outsourcing and offshoring age as more and more companies are becoming aware of this practice and are opting for it. Reported rise in productivity in the companies is one of the primary reasons for adopting outsourcing and/or offshoring. This increase in productivity attributed to both offshoring and outsourcing comes from the fact that less money and resources are spent for the same tasks compared to what was previously done.
Outsourcing and offshoring have also been easier due to the major enhancements in communication technologies. Monitoring progress and productivity of your outsourcers has never been this easy. It is found that companies which either offshore or outsource have a great global presence, and finding employees willing to work for these companies is not a big deal. Offshoring and outsourcing makes that seemingly simple business logic (but so hard to fulfill sometimes) definitely possible.
Saving cost and giving out jobs to places where it matters is one of the positive aspect of offshoring services. In brief it can be said that it’s getting higher quality workers and at the same time, cutting back on cost. These two ideas seem far from each other especially when talking about basic marketing principles but this is entirely made possible by offshoring and outsourcing.
Sophisticated jobs – Outsourcing jobs will shift less important jobs out of the client company therefore creating new sophisticated ones. This will require advanced qualifications thus focusing the country to educate its citizens more and focus on improving the quality of their own employees.
Focus on core functions – If we outsource business, we lessen added risk and worry and can concentrate on more important aspects such as Research and Development, Production/Operations, Finance and Administration/IT. Most client companies hire customer support employees from other countries to minimize the cost and then give more funds to Research or Marketing. This is a wise and logical move that delivers better results at a lower cost.
When it comes to offshore software outsourcing, India is considered as the leader in software development. But look out India, as Vietnam is quickly emerging as one of the best alternatives to India for offshore software development. Offshore development is expected to grow by 50% over the next few years. There is scope for the growth expectancy for the companies which are indulged in outsourcing software development.
Over the past few years companies have experienced immense success which has followed this model. Because of this, it is more than likely that many other companies will try and replicate the success of these companies and try their hand at outsourcing as well.
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