Thursday, November 03, 2005

To Offshore or Not to Offshore

Offshore outsourcing is a reality of the 21st century; however, the loss of fewer than 200,000 American jobs to India in a presidential election year experiencing low job growth proved to be a highly controversial issue. Yet, more and more service jobs – from stock market analysis to computer software development and troubleshooting – are being off-shored by US companies to India and other low-wage countries. Clearly, it makes economic sense to pay middle-class salaries ranging from $2,000 to $7,000 a year in these countries, opposed to paying the almost five times as much for the same work in the U.S.
In response to a speech by former Secretary of State Colin Powell, in which he encouraged India to open its markets to American goods – a thank-you for the offshored work it receives from American companies, Hari Singh, an Indian student retorted sharply: “Off-shoring / Outsourcing benefits the US as well since $1 outsourced here gives $1.40 back to the U.S. economy. We use U.S. computers to do the work, and we're drinking Coke and Pepsi. Every damn thing comes from the United States.”
In perspective, it is becoming more apparent that offshoring benefits both the outsourcer and the provider. Outsourcing benefits include:
1. Increased productivity
2. Cost reduction without compromising overall benefit goals.
3. Reduced employee headcount.
4. Access to sophisticated technologies, such as the latest call centre facilities without having to buy them.
5. Tailored vendor offerings for client specific needs.
6. Higher service level provisions to their employees.
Increasingly, companies lacking infrastructure and staff with little or no interest in investing time and resources to build in-house capability find offshoring the right choice, a smart choice. The long-term benefits of offshoring are immense provided one has the foresight and patience to invest in future paybacks. All said and done, offshore outsourcing is part of the new wave, the new world order, the sooner one accepts it, the better.

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