5/28/2007

Outsourcing V/s Offshore Outsourcing

While Outsourcing stands for giving out a part or certain parts of your business operations to a regional or local distinct business entity, offshore outsourcing implies delegation of the selected business operations to an offshore location outside the country.

The two concepts share some advantages and differ on others. The common benefits of outsourcing and offshore outsourcing include doing away with the burden of mundane business operations that can be easily and skillfully handled at an off-site location, generally for a lesser budget. Outsourcing is a brilliant idea to relieve the business entity from vain exertion and instead pay better attention to ones specialized services areas or may be provide more agile customer care. Also, outsourcing excuses the enterprise from the substantial set up costs, viz. the cost of work space, manpower, stationery, systems and other miscellaneous expenses that would otherwise incur, if the jobs are not outsourced.

While local outsourcing manages just a couple, offshore outsourcing comes with a whole baggage of advantages. The highlights of offshore outsourcing remain the niche economies available at the offshore location, including exceptional professional talent for considerably lower costs. In fact, inspired by the dynamism of offshore outsourcing model in India, not less than 40% of the Fortune 500 companies are already taking advantage of it, including big names like MicroSoft, Motorola, Oracle, GE and Lucent.

Economies of scale is another citable advantage from Offshore outsourcing, as offshore destinations generally conduct themselves as specialized ventures that also take up similar jobs from other companies across the globe. As statistics has it, offshore outsourcing can bring down the costs for you from 50% to 30%, subject to onsite and offshore resources.

Offshore outsourcing also allows you to make a careful choice as regards the standard timeframe on offer, so as to render the effective working hours almost round the clock. For example, IST and EST are complimentary in nature with around nine and a half hour difference. This in turn, considerably shrinks delivery time for US-based companies translating into achievement of business targets well within budget and sped up job schedule.

Moreover, offshore outsourcing can span across wholesome backend business operations; the most prominent of all being IT and IT enabled services (ITES) with a whopping 28% of the entire share. As per reliable reports, majority of IT based outsourcing contracts are already moving to India, in spite of competitive rates offered by China and Russia. India offers wider talent and more purchasing power for US dollar, in turn saving billions of dollars for its US counterparts.

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