Offshore outsourcing services emerged as early as the 80s. Most of the services provided then are finance, logistics, and accounting. Animation services were also offered.

At the onset of greater progress in information technology, outsourcing eventually grew and now includes a plethora of services ranging from software development, call centers, web domain and hosting, and legal and medical transcriptions, among others. It engages in any business processes such as production, manufacturing, or services. With these, offshore outsourcing has slowly become a formidable business venture, and has grown to be increasingly stronger either in the context of production or service outsourcing.

Countries all over the world have been significantly affected with the opportunities that outsourcing provides. After its accession to the World Trade Organization, China has become a major offshoring destination particularly in the context of production. While India, with the renewed technical progress in telecommunications, has turned out to be the leading destination in providing call center services and the like.

The economic logic used in offshoring is simply to cut cost. If some people are able to use their abilities more economical than others, then, those people have the comparative advantage for that particular service. The desired situation espoused here is that countries should freely trade the items and services that cost the least for them to produce. Such economic principle governs offshore outsourcing and how it is being carried out. And with that, it is undeniable to point that it produces benefits for countries engaged in it, whether they are the ones who outsource or are the outsource destination area.

As Business Process Outsourcing (BPO) continues to thrive in the Philippines, various sectors become increasingly responsive to the needs of this industry. In fact, the education sector and the government are adopting measures to support Philippine outsourcing by developing initiatives and design curriculums meant to equip graduates with sufficient competencies essential for the continued success of the industry.

            A case in point is the creation of a talent working-group meant to offer insights on labor and employment market trends, issues and directions, and plays "applicants' advocate" role during the design and testing of talents. CHED, DepEd, TESDA, and the umbrella association of outsourcing firms in the country, BPA/P (Business Processing Association of the Philippines) spearhead the campaign in preparing students to be ready for possible employment once they graduate.

            Aside from these, there are also partnerships between companies and universities in the pursuit of modernizing the curriculum to be more industry relevant. One school in Makati is currently strengthening its use of the English language by transforming the call center English program into a required English conversation class. Another school responded by way of providing a call center elective to graduating students wherein those who pass are guaranteed with call center jobs after graduation.

The various government agencies and educational institutions initiated the said activities the moment they found out that graduates are actually not equipped enough for them to qualify for employment in BPOs. Research studies show that out of the 400,000 fresh college graduates every year, only a quarter are proficient in the command of the English language, and are eligible to work in call centers and various BPOs. There is a glaring discrepancy between the jobs the industry can provide and the pool of workforce produced every year by college institutions. The industry can provide 600,000 new jobs by 2010. This can never be filled up by the few qualified graduates at hand.

For the mean time, various efforts are being adopted in order to improve the employability of graduates. The outsourcing industry provides a remarkable number of opportunities. Therefore, it is worthwhile to know that the government and the concerned sectors are finding ways in order to meet the said demand. After all, those efforts are for the benefit of all; on the part of the firms who are seeking assistance, and on the side of a nation where unemployment remains a pressing issue.

The financial indecision that occurs from the credit crunch is likely to lead to many outsourcing deals being renegotiated, reduced in scope, or terminated in 2009. The International Law Firm Pinset Mansons warns the industry that many investors would probably go into dispute.

The Law Firm also stated that long-term transformation projects may be delayed or terminated because businesses will most likely look at short-term cost cutting rather than at the longer-term benefits.

Many IT outsourcing deals come under pressure during times of financial uncertainty. This is because a better deal could be done in the depressed market or the anticipated level of expenditure on transformation is no longer sustainable.

Pinset Mansons recommends that businesses review their current outsourcing contracts so they would understand their options such as get-out clauses. They may also plan for the best strategy in advance.

Some companies, however, may use the credit crunch to outsource, it was reported yesterday and was found out that the credit crunch will "drive a new wave of outsourcing and offshoring in financial services as cash becomes tighter".

The thin supply of talented workforce remains a crucial issue especially for a fast growing industry. The Philippine business process outsourcing industry is said to have a shortage when it comes to the supply of savvy and eligible manpower. For instance, call centers are maximizing efforts in order to retain talent as turnover becomes a growing problem in this service-oriented industry. It has always been reiterated in various researches that there is a shallow talent pool for Philippine BPOs. Worse, the increasing attrition rate aggravates such condition. Statistics would show that the industry has a relatively high attrition rate of 20 percent annually compared to other industries which experience turn-over in a low single digit. Fifty-one percent of those who leave call centers eventually leave the industry for good.

The high level of attrition rate can be attributed to employee dissatisfaction. This issue lies on the fact that business firms like BPOs are naturally inclined to cut costs. A back clash happens when employees' compensation and overall working conditions are the ones hit by cost-cutting. Hence, as a reasonable reaction, it would be understandable that talented employees leave after a considerable time of working due to dissatisfaction and their dire need for better opportunities. For this reason, it won't be difficult to address such problem.

RP call centers were told to go beyond cost saving by the Call Center Association of the Philippines. Asia-Pacific Research also reminds them to convert themselves from doing cost-saving options into a primary avenue for revenue generation. In this case, it would just be a matter of strengthening company services like sales and consultancy particularly their customer care team.

Other suggestions are the following: the industry needs a culture that people would want to be a part of; call center offices need to have gyms, spas, rest areas and the like to take care of employees; and company policies may adopt more flexible working conditions like having home-based agents.

Those are just some of the suggestions that may benefit the industry and curb the issue on attrition. Perhaps, if these are properly practiced and applied, I don't think companies will still lose grip of their talented employees. After all, these are not meant to merely benefit the employees alone. Rather, they are ultimately meant to boost the outsourcing industry in the end.

One of the major challenges facing companies that bank on the outsourcing industry is making sure that they get a good return for the money that they dish out.

Outsourcing contracts regularly integrate an initial cost "reduction" of between 10 to 15 per cent which is set against the expense of running services in-house. In most cases, clients are able to make greater savings. However, the competitive nature of the IT industry and the dynamics of Moore's Law would make it mean that the true cost of IT can fall over the lifetime of a lasting contract.

The challenge for CIOs is distinguishing how far they should expect costs to fall and how they could influence their suppliers to either build cost reductions into a contract or to open up negotiations.

A new technology (which was unforeseen when the contract was signed) that dramatically reduces the cost base for a service poses a difficult. The change to IP-based networking, the increase of voice over IP, and the emergence of software as a service are all recent examples.

For that reason, CIOs would now be most likely be insisting on including benchmarking sections in outsourcing contracts, allowing them to compare both costs and service levels with those enjoyed by other companies with related technological needs.

A single international standard for contrasting outsourcing contracts and benchmarking projects is said to be run by the huge management consultancy firms.

Typically, companies benchmark when they get to the point where they either need to make a decision to outsource or decide to renew a contract. Normally, the Chief Financial Officer (CFO) will ask why, for example, PC prices have fallen and yet he is still paying the same price as what he had paid three years ago. On that point an outside benchmark is often needed."

Conventional benchmarking, however, has disadvantages. A consultancy-led benchmarking exercise can cost between $100,000 and $200,000 (£50,000 to £100,000). This can also be seen as an adversarial method of suppliers, especially when benchmarking is either not specified in the contract or a benchmarking section is not automatic but has to be "invoked".

The world of IT outsourcing today has reached its strongest performance within the decade, says a leading IT research firm. From January-June this year, 282 IT outsourcing contracts reached the value of  over $49 billion in total contract value (TCV), and $10 billion in annualized contract value (ACV) or the value of a contract divided by its period.

According to TPI, the largest data source and advisory firm in the world, the IT outsourcing industry marks a record in the business industry during the first quarters of the present calendar year. TPI, a division of US-based Information Services Group Inc. (ISG), tracks a commercial contract that has values reaching to more than $25 million.

According to the latest TPI Index, the recently-completed second quarter report produced significant market strength and a solid route for growth during the residue of the year. One hundred forty-six contracts were awarded in the global outsourcing industry, which are projected to be at the value of $25.6 billion in TCV and almost $5 billion in ACV in the second quarter.

The three measures point out a notable market strength as this was the strongest second quarter performance since 2000. In addition, each of the past three quarters has topped the $20 billion TCV mark. This series signifies the best three consecutive quarter performance ever.

The industry has witnessed the highest number of outsourcing contracts, TCVs and ACVs during the first half of 2008 in more than 10 years. At the average of the year, TCVs in the broader market is on a trajectory to conceal the TCV record of 2004, which has been the most productive full year to date.

The first half of the year has been concluded to be one of the strongest within more than a decade. This feat is credited to the 282 contracts worth nearly $49 billion in TCV, and nearly $10 billion in ACV, that were awarded in the first half of 2008. The said contracts yielded a fast year-over-year increase of 24% by TCV and 36% in ACV.

This indicates that the outsourcing industry is continuously increasing despite the difficulties that it is facing today.

There are lots of businesses sectors nowadays who are opting to outsource. That's why outsourcing remains optimistic even if in the middle of controversies. Some of us are not big fans of outsourcing, but for the firms themselves, the model is well bullet-proof. For countries that have a strong economy, outsourcing does well as they seek to optimize processes to grow faster. For those who currently have weaker economy, firms turn to outsourcing to batten down the hatches by extracting costs. In addition, in a moderate economy, outsourcing does well for a mixture of the two aforementioned reasons.

A few years had already passed and nobody seriously disputed the value of outsourcing: only where it is appropriate and how best to do it. It begins with low-cost operations offshore, to specialist experts via business process fools; the outsourcers have business under their spell. Businesses enthusiasts feel pretty comfortable with the various models, having watched as the pioneers took the arrows on their back.

Hence, being a human-to-human interaction, there will always be project failures and arguments, but outsourcing companies have emerged as the cash cows of technology services, as reliable a product as pork bellies, and containing similar amounts of fat.

Outsourcing is a hot political issue in the U.S. but there are indications that the process is not just one way - of Americans losing jobs, a topic that has worked its way into political campaigns since 2000, and moved in increasing rage, particularly among labor unions in the US.

Economists or other people believe that the issue was seriously overstated, and that the net effect has been relatively small. Actually, economists argue that in fact as many as 30,000 jobs have been produced directly by Indian companies investing in the US, for example, with a considerable multiplier effect beyond that.

The tally hardly shows up in US job counts, even during the seven lackluster years of the administration of President George W Bush, some 5.7 million net new jobs had been created by the end of 2007 in the US, with about as many as 7 million gained and lost each year. It means that the 200,000-odd that disappear overseas each year hardly show up in the employment tallies.

Study shows from Federation of Indian Chambers of Commerce and Industry (FICCI), those top companies from India are actually making a positive impact on the US economy. Though it's not that big enough at this point, but it is growing and, in addition to demonstrate the integration of the global economy, it holds positive signs for the future.

In fact outsourcing is positive for the larger economy, in that the reduced costs of production are passed on to consumers or provide capital for additional investment, which also generates jobs.

There are lots of Business Process Outsourcing (BPO) companies around the globe who are determined, and trying to be on top of the industry. That's why many companies are striving to be recognized as one of the top Business Process Outsourcing (BPO) destinations in the world today.  

As of the moment, three countries lead in the Outsourcing Industry, India, China, and the Philippines. However, the Philippines is continuously honing their skills, improving their edge to be positioned on top of China, and replace India as the number one outsourcing destination in the world. The reason is American companies who are big players in the international scene are choosing BPO Philippines to run their offshore call centers. Not like other outsourcing hubs of the world, BPO Philippines not only offers a high rate of exchange on its currency, English speaking population, but also a culture and lifestyle that are very much like western.

Philippines still share a big portion in the success of the Business Process Outsourcing (BPO) industry. Call centers remains huge in generating millions of revenues for the country over the past years. India was the major hub of outsourcing, but Philippines is gaining momentum in over-passing India on top. Outsourcing became an emerging industry offering methodical technology and never-ending job opportunities to millions of people when it started in the Philippines.

Business Process Outsourcing (BPO) in the Philippines is attributed in the offshore market, collecting a total of $25.6 billion in 2006, landing third between India and China. The overall offshore IT market is estimated at a whooping $36 billion and growing. Compared to 2004 the revenue has increased to 62% with posted income of over $1.3 billion in the same year. In 2006, around 200,000 talented Filipinos are working in 120 BPO facilities nationwide. It is projected by the government and outsourcing players that the BPO facilities will earn US$11 billion by employing 900,000 people by the year 2010.

For this reason, many outsourcing players started to expand their operations in different parts of the country. If this continues, it is possible for the country to be known as the number one outsourcing capital of the world.

The growth of outsourcing industry today is indeed unstoppable. But according to the research and consulting firm Forrester Research, jobs have been lost in the IT sector in the United States because software outsourcing is actually low paying IT jobs. Among these low paying jobs are software programming, computer support specialists, and/or computer operators.

The high paying jobs are system analysts, network analysts and research analysts that are still dominating in the market as well. The jobs in this sector estimated the growth at a steady rate of 4% to 5% every year. It requires domain knowledge and idea about the internal working of IT systems and business process in this area. In software outsourcing these qualities are difficult to come through.

The jobs that are not affected by software outsourcing are system analysis and application development, which the rate increased of 6% per year. The reason of this increase is that the on-going demand of these areas is still increasing.

By outsourcing to low-cost countries like India and The Philippines, software outsourcing job rate would probably increased, but buyers still need in-house workforce as well to customize and upholder software. Large numbers of foreign companies are shipping jobs in Offshore Software Development, BPO and Call Centers to their Indian contributors or contractors, in India or The Philippines with a mind set of cutting costs by way of Offshore Outsourcing.

According to a research report, the forecast of software outsourcing industry in the near future might be declined. In addition, attraction of cost savings in software outsourcing is still very high and because of that, increase in jobs like software programmers will be extremely less.

Furthermore, the market of software outsourcing which has major costs savings today will decrease by 2008. Major reason behind this is the decreasing gap between the US salary and the outsourcing countries such as India, as it will lower the salary in US. While in India and other offshore software development countries, salary rise will be very high and this will also decrease the costs saving because of lack of availability of resources.

It is true that the offshore outsourcing industry is still increasing, and still surviving, because of lower costs from countries like India and Philippines, who really dominate in this industry.

Virtual assistants have proved themselves competent and in fact leading the internet world. We hear of them everywhere, and we wonder what could have driven virtual assistants up the ladder. Alright, the world is in need of people equipped with skills, people who don't just work per se, but skilled and competent persons.

Skilled labor comes with a cost. Virtual assistants beat this by offering services on affordable prices. These home-based professionals who work on flexible hours charge inexpensive rates that any employer or company would hardly resist. You also have the option to pay them per hour or per task, so you only need to pay for the time spent working for you. As independent professionals, virtual assistants spare you from paying for employees' taxes and other benefits.

If you are bothered by the quality of work virtual assistants can give you, sit back and be not wary. Virtual assistants are screened and tested to fit their client's needs; that said, you are assured of an impressive quality of work from these professionals. Virtual assistants are also on contractual; as such, you need not pay for idle hours nor fret about annual contracts.

While there are still many other reasons why most business owners now prefer virtual assistants, it is evident that cost savings is a big factor on this continuing trend. Virtual assistants provide not only grunt work and man power, but skilled and competitive business results.  These professionals make business much easier and faster; they effectively and efficiently deliver results for a rate any employer or business owner can afford.

Most people nowadays prefer electronic marketing or internet marketing. The number of online businesses continues to escalate and yet more people are motivated to venture in this kind of business. Now if you think of setting up your own internet business, here are some concerns you need to figure out:

1. Domain Name - Your domain name is your identity on the internet world. Choose a shorter name, but try as much to come up with a domain name that contains keywords on it to make it more compelling. Add modifiers -preferring words that apply to your products and business. Check for availability of domain names through www.dotster.com to avoid duplication of domain names.

2. Web Design - Web designs play an important role in your online business. Get a professional web designer to create the design of your site. Web designers will help you understand your business and online goals, something that is impressive enough. Regular maintenance and updates on your site are also done by web designers - ensuring updated contents on your site.

3. Web Hosting - These are websites online that are capable of hosting your own site somewhere. While there are many companies that offer domain name and hosting, industry expert Tamara Field strongly suggests that you consider the following:

            Real Live Support - confirms that there is always a web support agent or customer care representative to attend to your queries and problems whenever you need it

            Guarantees - check for money back guarantees or guarantees of refund for unused hosting. After all, who would want to pay for nothing?

            Upgrade Path - choose a web hosting company that offers not just additional bandwidth and storage upon upgrades; compare web hosting companies based on their special offers and product information. In the end, settle for that which offer the best ecommerce products.

4. Email Address - Your email address is your ticket to the Internet world. This is your ultimate communication tool to your customers and potential customers. Your outsourced service provider should help you put up with an email address that includes your business name, URL, and a brief description of your products and services. 

5. Promotion of your website - Bring enormous traffic to your website and get listed on search engines landing pages.  Penetrate the search engine keyword market via Google Adwords. Or if your budget warrants it, get a professional search engine optimization consultant to manage your online search engine advertising campaign.