Tuesday, October 25, 2005

Outsourcing: And, the Winner Is

Economic History shows that liberalised countries with receptiveness to global trading perform well on the economic scale as compared to those that shut the rest of the world out. The end of World War II saw America and other developed nations champion the cause of trade liberalisation having seen the deleterious results of trade protectionism during inter-war years. The opening of markets to free trade of goods and services spurred growth that saw America and Asian Tigers comprising of Japan, Singapore, Taiwan, S. Korea and Hong Kong emerge as economic powerhouses. Take a look at China, a country that owes its economic prosperity to western investment by way of opening its markets to the goods and services offered.

Similarly, by off-shoring and outsourcing to countries that can do what they do best at cost effective prices means people can buy goods and services far cheaper than domestically. This allows incomes to stretch further improving the buying power of people who can now purchase more goods and services due to the cost effectiveness of outsourcing or off-shoring. And, outsourcing enables freeing up of labour and capital for high-end work by off-shoring data management, accounting, back office operations and call centres to countries like India that do an excellent job for less than half the cost of what these operations cost in USA or the EU.

An assessment of the reciprocal benefits of outsourcing indicates that:

EU / American consumers profit from outsourcing through gains in consumption,
Leaner budgets give American producers a globally competitive edge,
More employment opportunities are created at home,
Outsourcing / off-shoring allows redundant employees to advance careers by honing skills or changing jobs,
A strategic solution to diminishing resources i.e.
- aging workforce,

- insufficient people going in for higher education e.g. doctors, scientists, IT professionals, nurses, teachers, etc.

Off-shoring / outsourcing work due to diminishing resources allows us to provide services for which we have the resources. By capitalising on the opportunities provided by outsourcing or off-shoring, and avoiding its pitfalls, we can make it work to the common advantage of all involved. Outsourcing or Off-shoring is the byword of the 21st century, a trend that will prove to be a mutually satisfying experience for all concerned!

The article sponsored by A-1 Technology Inc, dealing in software outsourcing and application development outsourcing