Outsourcing: April 2008 Archives

The Philippines has become one of the top providers of web services to clients around the world.  Filipinos are known for their skill and intellectual know- how in terms of web development and design. The Philippines is also one of the countries that has a large population of people who speak the English language very well which plays a very critical role in the outsourcing business.

Over the years, the Philippines has established many companies that offer varied outsourcing services and their numbers are rising every year. Outsourcing services in the Philippines are very affordable compared to other countries. This is one of the reasons why the Philippines is becoming famous in the outsourcing world.

Why do a lot companies outsource jobs? They outsource jobs to cut costs and save time in order to do more jobs at the same time. This is important for the company to double it's profit and output in a timely manner.

In outsourcing, it is important to maintain good quality. It is proven that outsourcing services in the Philippines provide good quality and reliable output which satisfies customers. However, there are also some people who produce good quality products and services but fail to satisfy customers. So be careful when choosing a outsourcing partner.

The constant innovation of our Technology today makes every business in the world embrace the tools to develop business strategies. Through these strategies, international trade and investment increases. It has brought a remarkable change in business cycles and has steadily contributed to economic advancement. As we have witnessed through the years, the rapid modernizations of technologies influence the restructuring of business processes.

The so called e-Business technology gave a major modification of the way a business is made. Many companies now make the transition from old business designs to the modern business processes through IT solutions. In this transition of business cycles, the implementation of the new organizational planning created a different process of business activity entrusting a third party of the company's technology platforms, data management and other resources.

Due to the rising need of many companies in these business processes, there are a lot of Business Process Outsourcing(BPO) companies offering IT-Solution services. The sprouting growths of Outsourcing companies greatly influence many sectors to expand their business online. And it is now the role of IT-Outsourcing companies to deliver excellent services to their clients to remain in the industry. The assurance of quality business process must satisfy the clients in catering to the requirements they needed.

Outsourcing is a radical choice. This may not sound really adventurous, but at a closer look, outsourcing is, in fact, taking a major decision. While it may be known to all that outsourcing is relatively beneficial to the company, it also poses threats and challenges that needs to be addressed. There are several concerns that have to be faced and resolved if necessary.

Outsourcing can create an enormous impact to the company. It promises bigger chunks of savings on expenditures, and proposes greater investment returns. These are the primary features any outsource service provider brags about. However, it is still noteworthy to make the best choice and to opt for the best outsourcing team in order to get the most benefit out of such trend and leverage your advantage in the competitive market.

An appropriate response to this is taking several considerations before finally deciding which company to outsource to. Selection of appropriate offshore location demands that political and economic fidelity of the country be considered, just like language and manpower pool, and the condition of the country's existing telecommunications infrastructure. These aspects of the government -e.g., politics, economics, language, manpower reserves, and infrastructure/ technology- play an important tool in the advancement of any business endeavor.

Selecting an ideal outsourcing partner entails yet another set of considerations: price, expertise in particular industry, integration capabilities, trainings and qualifications, overall customer-service strategy, company information privacy, and knowledge in the latest technology. All these are core values an outsourcing service provider must come up to in order to fit in to your needs. Price remains a prime concern as outsourcing is basically a cost-cutting technique. This is not as cheesy as it may sound though, because in the long run, you may be realizing you outsourced to the wrong service provider and end up losing a considerable amount of money without getting your target revenues.

Offshore outsourcing started when the loss of American jobs to foreign markets began  for decades in manufacturing, textiles, and almost any field that involves factory work. Offshore outsourcing is becoming prevalent in the news recently because its professional jobs are considered secure, avoiding losses  to overseas contractors. Y2K bug and dot com boom, are the two reasons for the unexpected outburst of  outsourcing in the IT industry. The two events are greatly created out of need from developers that could perform mundane repeated tasks at a low cost. Since then when America couldn't provide enough workers at that time, companies looked elsewhere, and found India.

After becoming the first offshore outsourced country in the world, India has become the phenomenal growth in a very short span of time. The idea of outsourcing has its roots in the competitive advantage theory. Over the years, the meaning of  the term "outsourcing" has undergone a change of opinion. It started shifting of manufacturing  to other countries because of cheap labor during the industrial revolution, has taken on a new connotation in today's scenario.

 
It has become the spine of businesses worldwide. Outsourcing is the process through which one company hands over part of its work to another company. They are responsible for the design and implementation of the business process under strict guidelines regarding requirements and specifications from the outsourcing company. This kind of process is beneficial to both outsourcing company and the service provider, not to mention the enabled outsource to reduce costs and increase quality in none core areas of business and competencies to the maximum.

 
Offshore outsourcing is really a big impact to the economy, not only in America but also to other countries being outsourced.  The growth of sudden job rate in the economy is one of the reasons why economy is doing well.  Other countries that are doing well in shared service outsourcing namely Philippines, alongside with  India and Malaysia. To complete the top 10 countries; there are China, Ireland, Singapore, Mexico, Czech Republic, Poland and Canada.

Nowadays, business sectors are focusing on their core competencies. That's why economic and competitive pressures made its imperative for organizations of all sizes to focus on their core competencies and turn to third parties, assuming responsibilities to other secondary corporate functions. Hence, leveraging third-party alternatives can reduce costs and improve operating efficiencies.

Outsourcing helps in increasing job rate of the economy that gives an opportunity for individuals who are lucky to have the job and more advantageous to the companies who are doing this kind of strategy. It is also cheaper and cost effective way of business tactics for all companies, specially for Internet and manufacturing companies.

The firm responsible chooses a country where they can find raw materials for the products they are making. Web publishing or internet marketing companies are helpful in creating and managing your web site.

The question is, what will you choose? Will you choose the ones who are far from you but offers affordable labor cost or the ones who are near but expensive?. That fact is that  employees from outsource companies cost cheaper than employees based in New York.

Therefore, offshore outsourcing can save on the financial aspect of the company, improve working efficiency, increase company flexibility and improve company focus. For smaller companies, it helps in leveling the playing field with big corporations and reduce business risks.

The benefits of outsourcing go beyond pricing. Cost is no longer one of the top benefits of outsourcing for CIOs. Many companies are now looking at strategic value and speed to market as the primary benefits of outsourcing.

Most business groups turn to outsourcing for financial and economic reasons. Of course, we all know that outsourcing is a cost-cutting technique; but that's not all about it. Service providers promise to create improvement and facilitate innovation which later results in better services. In that sense, outsourcing helps improve service performance of the company. 

Outsourcing is a trend nowadays. This demand for outsourcing has triggered the influx of outsourced service providers, each with a promise to keep your company in the lead against its competitors. It is your task then to select the service provider that will help you achieve your business goals, that will work with you in accomplishing your tasks and help you stay upbeat in the market.

Define your needs. Outsourcing involves money. Costs vary depending on the kind of service you need: whether you are looking after disaster recovery or business continuity.  Have a self-analysis to help you determine the type of service you require, that way you pay for what you actually need and get the right help.

Consider locations. Don't disregard the location and proximity of the service provider's data center. It should be easily accessible by you and your IT staff. That way, it is not hard for you to visit the data center. It is also important that the data center has a good physical security, redundant power, separate power grids and communication links.

Count on experiences.  Service providers must be positioned to support every type of emergency. Feel free to ask questions like how many disasters they have handled, the type of recoveries they have done, and the average size of company that they have recovered.

A contract with any service provider should at least three years. A CIO Midmarket report said that "one year is too short a contract because of the amount of time and effort involved in bringing in a new vendor, and five years is too long because customers don't get to leverage falling technology costs". How long the duration of the contract is, you're ascertained that there is sufficient testing and flexibility of the contract you are bound to get into.

In any case, you should outsource to a service provider that can meet your recovery needs if problems on the outsource provider itself arises. Choose a service provider that can give you total solution to your business needs.