Outsourcing is a term used in business and it is gaining popularity on the net as millions of web site owners discover they do not have all the tools and skills necessary to handle each and every portion of their businesses.
Unlike having to find, interview, and hire an employee - and thus incur the tax liability of a new employee - often savvy business owners turn to outside companies. Outsourcing services take on the tasks underlying a business leaving the owner more free time to pursue the front-end of his or her business.
Wikipedia states:
"Outsourcing" involves transferring or sharing management control and/or decision-making of a business function to an outside supplier, which involves a degree of two-way information exchange, coordination and trust between the outsourcer and its client."
Outsourcing, therefore, becomes an integrated part of your business. The importance is to determine what should be outsourced, why it should be outsourced, and who will provide your outsourcing services.
Business segments typically outsourced include:
* Information technology
* Human resources
* Facilities
* Real estate management
* Accounting
* Direct Online Marketing and SEO
In addition, many companies also outsource their customer support and rely on call center functions.
Using the Know How of Others
The business owner must be able to step back and make an honest evaluation of his or her talents. We are not all created equal. We all have different strengths. One surefire strength for business success that a business owner must cultivate is the ability to delegate responsibilty through the use of outsourcing. That's how a well-run, profit-pulling online business accomplishes its goals.
Today's businesses - large and small - gain immense benefits by finding other companies outside their own arena who possess the technological know how to analyze, plan, and implement target objectives.
In the case of the smaller web site owner looking to gain greater footing with the hot market of search engine results, finding an outsourcing service to handle marketing (and a small portion of advertising) is one such effective strategic move.
Traditional approaches to search engine marketing have, for decades, focused primarily around a web site's meta tags, firming up web page content, and then submitting the site on a regular basis to the search engines. From a purely advertising basis, other companies will insist that just driving "targeted traffic" to a site is "enough."
While both of these methods are viable, a good outsourcing company often adds these two methods at low cost or no cost - just bonuses while the real work of marketing is underway.
Choosing the Right Outsourcing Company
As an online business owner it is easy to become frozen in place trying to keep up on all the possible, working, methods for marketing online. Even if one could find the time to read everything and devise a plan, putting that plan into action becomes cumbersome. Doing even the "smallest" of tasks can literally take hours of your week away from you. Hours better spent on web site enhancements and new products, mailing list contacts, and just being there for your web site visitors. Unless the web site owner is willing to give up some control, the grind of working the foundation of marketing too often must supercede the human approach to being there for your customers.
While we all love to do our initial digging online, pick up a phone and call or send email inquiries or submit forms for call back when choosing an outsourcing service. Make sure your questions are addressed intelligently and at a level of understanding that you feel most comfortable with. Avoid listening to prescripted sales pitches where all they want to do is monopolize the phone and beat you down to the point where you really don't know what they can or cannot do. Take control of the conversation, then turn that conversation into an effective two-way street of open communication. Any company not willing to do that - or vague in their explanations of how - should be moved to the bottom of your list as you locate the best outsourcing company to work with you and your website.
Finding a company that understands and weeds out fad flash-in-the-pan methods, and builds your marketing business on solid, proven methods of web site promotion should be your goal. Find that company and establish a two-way street of information and trust in order to work effectively together.
How to Incorporate Outsourcing Into Your Business
"Prior to the contract development of any outsourcing agreement, the outsourcing company develops a request for proposal (RFP) document which highlights the major requirements and scope of the project which is to be outsourced."
Through a bid-like process, or the acceptance of agreed upon stated services at given costs, the recipient company has an actual proposal of services in hand. They know what they are getting, what timeframe to expect, and projected results from this outsourced service.
By outsourcing, the owner understands what the benefits to the service(s) are, but the strategizing, planning, and implementating can be safely placed into more knowledgeable and efficient hands to get the job done.
In Summary
Outsourcing is not just for the "big guy." Overall outsourcing is viewed by many organizations as a strong business tactic that ultimately is a superior economical approach to developing products and services.
Simply put, don't try to do everything yourself. You may have many fine strong points, but running your online internet business single-handly should not be one of them. Learn when and delegating responsibility can actually make your business grow by leaps and bounds. Then find an outsourcing service you can work with - one with a complete understanding of your web site - one that is willing to go extra miles to make your business a success.
1/19/2007
Offshore Outsourcing and its Growth
Offshore Outsourcing has now been the main business process for many companies worldwide in almost all the industries. More and more overseas business process is now taking place day by day and the overall process is becoming very mature. There are lots of companies which have their highest investment in this overseas process rather than the local business and they are earning like any thing. More and more investment in this process also gives the hike to the overall business. This process of overseas business is not newer as it used to take place in the past centuries also. In the past the overseas business used to take place because the country running short of resources, but in current scenario this way of the business is prevailed because of the cost cutting advantage that it possesses. In the past there wasn’t any particular way of doing the business for overseas deals. Both parties involved in the deals used to do the business on the basis of trust on each other. But now the different scenario is taking place in the overall business process of Offshore Outsourcing globally.
In the process of Offshore Outsourcing it seems that the next generation is taking place. Innovation of latest technologies in the market has also boomed up the process globally, still the main reason behind this business way is to gain the cost cutting advantage. In present scenario there are lots of legal laws and formalities for the overseas business. Clients and vendors both have been very much mature to face almost any challenges related to it. Legal contracts associated with the overseas business makes the deal run smoothly. In present scenario every one takes lots of care before entering into such contracts even if the opposite party is very much known to him. As the business process is getting more and more popularity, increase in frauds is also taking place in the market in Offshore Outsourcing deals. More and more precaution and caring steps are taken now to avoid the business risks. In short the whole business process is now getting changed.
Offshore Outsourcing
In Offshore Outsourcing the process of BPO is at the boom in the market globally. Many telecommunication companies are investing big amounts in such process and making profit out of it. In present scenario both clients and vendors believe in making long term relationships rather than just the professional relationships in IT Outsourcing. More and longer term contracts are also taking place because of it. In present scenario almost all the services are available through the Offshore Outsourcing. Even no real investment is required to start the business.
In short the process of Offshore Outsourcing is now reaching to its top and becoming more and more mature. Its popularity and use is increasing day by day because of the advantages associated with it. The overall market scenario is also changing because of this in overseas business. Offshore Outsourcing has made its home into the roots of almost all the industries.
In the process of Offshore Outsourcing it seems that the next generation is taking place. Innovation of latest technologies in the market has also boomed up the process globally, still the main reason behind this business way is to gain the cost cutting advantage. In present scenario there are lots of legal laws and formalities for the overseas business. Clients and vendors both have been very much mature to face almost any challenges related to it. Legal contracts associated with the overseas business makes the deal run smoothly. In present scenario every one takes lots of care before entering into such contracts even if the opposite party is very much known to him. As the business process is getting more and more popularity, increase in frauds is also taking place in the market in Offshore Outsourcing deals. More and more precaution and caring steps are taken now to avoid the business risks. In short the whole business process is now getting changed.
Offshore Outsourcing
In Offshore Outsourcing the process of BPO is at the boom in the market globally. Many telecommunication companies are investing big amounts in such process and making profit out of it. In present scenario both clients and vendors believe in making long term relationships rather than just the professional relationships in IT Outsourcing. More and longer term contracts are also taking place because of it. In present scenario almost all the services are available through the Offshore Outsourcing. Even no real investment is required to start the business.
In short the process of Offshore Outsourcing is now reaching to its top and becoming more and more mature. Its popularity and use is increasing day by day because of the advantages associated with it. The overall market scenario is also changing because of this in overseas business. Offshore Outsourcing has made its home into the roots of almost all the industries.
BPO: Tightening the Focus on Process and Business Transaction
Capgemini and IDC have unveiled "From Transactional to Strategic BPO: Putting the Evolution in Context," a coauthored report contending that while business process outsourcing (BPO) can lower costs and improve productivity, it's gaining traction as a strategic tool for process and business transformation. The report is based on the results of pulse surveys with a combined total of more than 100 executives at the March 2006 and September 2006 IDC Forums.
Not surprisingly, respondents tapped reduced costs as the most important driver for incorporating BPO into their corporate strategy, with 68.2 percent. Focusing on core competencies secured the second position, albeit garnering a substantially smaller percentage than reducing cost--22.7 percent.
"There will always be an accelerating pressure to drive down costs, but fueling innovation requires shedding non-core activities to maintain focus, thereby freeing up cash to continuously invest in core competencies and focus on driving a better return on capital across the enterprise," Capgemini's Viewpoint states. Other drivers ranked include supporting growth (9.1 percent), and driving innovation and accessing best practices, both tallying 4.5 percent.
"Early on a lot of companies experimented with IT outsourcing and had seen results in terms of cost reduction but also flexibility in their operations, supporting M&A and growth areas, and also being able to focus on their core business," says Maureen Barry, director of global marketing and communications for Capgemini and an author of the report. "So they're looking at aspects of their SG&A or their company operations and how they can do the same in other areas such as finance and accounting, HR or customer care."
Survey results also revealed that 85 percent of respondents have saved at least as much as they invest in outsourcing, while 26.4 percent noted that they've saved at least twice the size of their investments. When it comes to how companies are using savings from outsourcing, however, most--63 percent--have invested savings amassed as a result of outsourcing back into the company to enhance operational performance, drive innovation or support growth, according to the report. Slightly less than one third--31.6 percent--noted that the savings went to their bottom line, improving shareholder value. The report also contends that 5.3 percent used the savings to cover the cost of outsourcing while improving flexibility or agility. It is important, though, that companies keep in mind that potentially hidden or overlooked expenses like travel costs have the potential to reduce expected savings.
One of the main issues that companies must be aware of when evaluating BPO providers is that the company has industry-specific experience. "Technical competence alone is not enough in BPO," Capgemini's Viewpoint states. "To deliver the full value of BPO, a provider must understand the challenges, best practices, and business issues driving a particular industry."
Not surprisingly, respondents tapped reduced costs as the most important driver for incorporating BPO into their corporate strategy, with 68.2 percent. Focusing on core competencies secured the second position, albeit garnering a substantially smaller percentage than reducing cost--22.7 percent.
"There will always be an accelerating pressure to drive down costs, but fueling innovation requires shedding non-core activities to maintain focus, thereby freeing up cash to continuously invest in core competencies and focus on driving a better return on capital across the enterprise," Capgemini's Viewpoint states. Other drivers ranked include supporting growth (9.1 percent), and driving innovation and accessing best practices, both tallying 4.5 percent.
"Early on a lot of companies experimented with IT outsourcing and had seen results in terms of cost reduction but also flexibility in their operations, supporting M&A and growth areas, and also being able to focus on their core business," says Maureen Barry, director of global marketing and communications for Capgemini and an author of the report. "So they're looking at aspects of their SG&A or their company operations and how they can do the same in other areas such as finance and accounting, HR or customer care."
Survey results also revealed that 85 percent of respondents have saved at least as much as they invest in outsourcing, while 26.4 percent noted that they've saved at least twice the size of their investments. When it comes to how companies are using savings from outsourcing, however, most--63 percent--have invested savings amassed as a result of outsourcing back into the company to enhance operational performance, drive innovation or support growth, according to the report. Slightly less than one third--31.6 percent--noted that the savings went to their bottom line, improving shareholder value. The report also contends that 5.3 percent used the savings to cover the cost of outsourcing while improving flexibility or agility. It is important, though, that companies keep in mind that potentially hidden or overlooked expenses like travel costs have the potential to reduce expected savings.
One of the main issues that companies must be aware of when evaluating BPO providers is that the company has industry-specific experience. "Technical competence alone is not enough in BPO," Capgemini's Viewpoint states. "To deliver the full value of BPO, a provider must understand the challenges, best practices, and business issues driving a particular industry."
Slow BPO, ITO Markets Growth in The First Half of 2007
Overall outsourcing demand is generally growing, but at a slower pace than in previous years, and points toward slow Business Process Outsourcing (BPO) and IT Outsourcing (ITO) markets growth for the first half of 2007, unveils the results of EquaTerra’s 4Q06 Outsourcing Pulse Surveys — conducted among its own advisors and a wide variety of leading service providers to reveal in-the-field insights into ITO and BPO activity during October through December 2006.
The Everest’s survey findings also illustrates that contrary to popular views and portrayals, the prevalence of outsourcing contract re-negotiations, re-competes and re-structuring are not a widespread sign of “deals gone bad” or the demise of the outsourcing industry. Rather, buyers, service providers and outsourcing advisors alike view them, in most cases, as a catalyst and opportunity for improving the deal.
The survey result also show that outsourcing of non-traditional functions such as document and imaging services, legal processing, Knowledge Process Outsourcing (KPO) and logistics services is on the rise, which signals an increase in both supply and demand.
According to the survey, a continuing increase in multiprovider sourcing that can benefit buyers if it allows them to engage the best service providers for each of the processes being outsourced, but can also be more complicated and expensive to manage than sole-sourcing, finds the survey. Most buyers continue to underestimate the cost and complexity associated with performing Outsourcing Management and Governance (OM/G) activities, and shortcomings in: The staffing of the governance organization; costs associated with the use of third-party services such as lawyers, advisors and benchmarking firms; and the costs for software tools to support OM/G efforts are often one of the root causes for problems with outsourcing transitions and dissatisfaction with ongoing outsourcing.
The Everest’s survey findings also illustrates that contrary to popular views and portrayals, the prevalence of outsourcing contract re-negotiations, re-competes and re-structuring are not a widespread sign of “deals gone bad” or the demise of the outsourcing industry. Rather, buyers, service providers and outsourcing advisors alike view them, in most cases, as a catalyst and opportunity for improving the deal.
The survey result also show that outsourcing of non-traditional functions such as document and imaging services, legal processing, Knowledge Process Outsourcing (KPO) and logistics services is on the rise, which signals an increase in both supply and demand.
According to the survey, a continuing increase in multiprovider sourcing that can benefit buyers if it allows them to engage the best service providers for each of the processes being outsourced, but can also be more complicated and expensive to manage than sole-sourcing, finds the survey. Most buyers continue to underestimate the cost and complexity associated with performing Outsourcing Management and Governance (OM/G) activities, and shortcomings in: The staffing of the governance organization; costs associated with the use of third-party services such as lawyers, advisors and benchmarking firms; and the costs for software tools to support OM/G efforts are often one of the root causes for problems with outsourcing transitions and dissatisfaction with ongoing outsourcing.
BPO unit helps improve operating margins
The business process outsourcing (BPO) division of Wipro Technologies continues to gain traction and is expanding its service line while also helping the software services major boost its operating margins. For the third quarter of the current fiscal, Wipro BPO unit reported revenues of Rs 235.8 crore, showing a sequential growth of 2.5% in rupee terms and 7.1% in dollar terms. On a year-on-year (Y-o-Y) basis, revenues grew by 24%.
During the third quarter, Wipro BPO made a net addition of 1,508 people taking its total headcount to 16,863, while attrition stood at 14.8%. The addition of headcount in this quarter is against a negative of 584 people in Q2 of the current fiscal. Wipro CFO Suresh Senapaty said: “We witnessed a continued margin expansion in our BPO business by 60 basis points sequentially.”
T K Kurien, chief executive, Wipro BPO, said that margin expansion came in despite the full impact of the salary hike effected during the quarter. He said Wipro BPO has been expanding into newer service lines especially in the financial services sector. Currently, it has about 115 service lines, up from 101.
The mix of people being taken into Wipro BPO business has also seen change with the more emphasis on campus recuirtment to creat a more stable employee base. The third quarter also saw people with backgrounds like chartered accountants, MBAs, analytics join the company.
Mr Kurien said that it is taking numerous HR related initiatives which include the top management touching base with its employees every month along with increasing the brand pull of Wipro BPO. In the coming quarters, Wipro BPO is looking at improving its pricing as it has been recording 4-6% increase over the last one year.
During the third quarter, Wipro BPO made a net addition of 1,508 people taking its total headcount to 16,863, while attrition stood at 14.8%. The addition of headcount in this quarter is against a negative of 584 people in Q2 of the current fiscal. Wipro CFO Suresh Senapaty said: “We witnessed a continued margin expansion in our BPO business by 60 basis points sequentially.”
T K Kurien, chief executive, Wipro BPO, said that margin expansion came in despite the full impact of the salary hike effected during the quarter. He said Wipro BPO has been expanding into newer service lines especially in the financial services sector. Currently, it has about 115 service lines, up from 101.
The mix of people being taken into Wipro BPO business has also seen change with the more emphasis on campus recuirtment to creat a more stable employee base. The third quarter also saw people with backgrounds like chartered accountants, MBAs, analytics join the company.
Mr Kurien said that it is taking numerous HR related initiatives which include the top management touching base with its employees every month along with increasing the brand pull of Wipro BPO. In the coming quarters, Wipro BPO is looking at improving its pricing as it has been recording 4-6% increase over the last one year.
ISO27001 Certification For Neusoft's Software Outsourcing
Two of Neusoft Group's subsidiaries have been certified by ISO27001, the specification for Information Security Management System.
The two companies are Neusoft Coompany and Neusoft IT Service Company. The British Standards Institution issued ISO27001 certificates to Neusoft, which makes Neusoft the first of its kind to obtain ISO27001 certification for both software outsourcing and BPO operations in China, opening up vast prospects for further expansion of Neusoft in such two sectors.
According to Neusoft, it has, through acquisition of such certifications, successfully set up standard practices for internal information security management, leveraged company-wide protection against information assets, and enhanced information security awareness of all employees to ensure security of clients' assets, lower down information security risks, and guarantee smooth progress of all business operations.
More importantly is that such ISMS will help protect clients' sensitive information and provide them with secured, reliable service, which will give more confidence to clients in their partnership with Neusoft who will in turn have more instigated initiatives to go global, especially in BPO and software outsourcing.
Neusoft has ranked tops in offshore software outsourcing for two consecutive years in China from 2004 to 2005. In 2006, it has successfully shifted its business focus from ITO to BPO and extended its international market coverage from Japan to Europe and America, making milestone achievements.
The two companies are Neusoft Coompany and Neusoft IT Service Company. The British Standards Institution issued ISO27001 certificates to Neusoft, which makes Neusoft the first of its kind to obtain ISO27001 certification for both software outsourcing and BPO operations in China, opening up vast prospects for further expansion of Neusoft in such two sectors.
According to Neusoft, it has, through acquisition of such certifications, successfully set up standard practices for internal information security management, leveraged company-wide protection against information assets, and enhanced information security awareness of all employees to ensure security of clients' assets, lower down information security risks, and guarantee smooth progress of all business operations.
More importantly is that such ISMS will help protect clients' sensitive information and provide them with secured, reliable service, which will give more confidence to clients in their partnership with Neusoft who will in turn have more instigated initiatives to go global, especially in BPO and software outsourcing.
Neusoft has ranked tops in offshore software outsourcing for two consecutive years in China from 2004 to 2005. In 2006, it has successfully shifted its business focus from ITO to BPO and extended its international market coverage from Japan to Europe and America, making milestone achievements.
Asia-Pacific Outsourcing Market Bucks Global Trend
The outsourcing market in Asia-Pacific grew strongly in 2006, according to TPI, the world's largest sourcing advisory firm. In its first, semi-annual 'TPI Index' for the region, TPI reported that the number of deals signed in Asia-Pacific valued at more than US$25M had increased by 43%. The total value of these contracts has increased 67%, representing a five year high in outsourcing activity.
This level of activity contrasts sharply with the global trend. Although the number of contract awards globally increased by 3%, the value of these awards declined by 8% compared to 2005.
Arno Franz, Managing Partner of TPI Asia-Pacific, commented, "2006 was a stand-out year for outsourcing in Asia-Pacific. The region accounted for 13% of the global outsourcing market in 2006, the first time its market share has exceeded 10% since 2002. However, because the relative immaturity of the Asia-Pacific market makes it prone to spikes in activity, it remains to be seen if this is the start of an on-going growth trend."
Asia-Pacific is also showing consistent year-on-year growth in annualised revenues, the total revenues available annually to the service provider community. The Compound Annual Growth Rate (CAGR) for the region stands at 10.5%, more than double the global rate of 4.5%
Arno Franz continued, "Despite the 'lumpy' nature of the Asia-Pacific market in terms of yearly contract awards, the sustained growth in annualised revenues since 2002 suggests that there is strength in the Asia-Pacific outsourcing market."
At the same time, competition in the region has been heightened. The Big Six of outsourcing (Accenture, ACS, CSC, EDS, HP, IBM) are winning a decreasing proportion of those deals valued at over US$25M. This group won 40% of Asia-Pacific total contract value, compared with a 60% share in 2002.
Arno Franz concluded, "The increasing level of competition confirms that clients in Asia-Pacific are following the global trend and are becoming more receptive to doing business with non-Big-Six Providers. Alongside the global giants of outsourcing, there is clearly room for smaller, specialised service providers who can address specific client needs. As the market matures, we should see this level of competition increase significantly. At the moment, success for service providers in Australia, India and Japan seems to be the determining factor for success in Asia-Pacific."
This level of activity contrasts sharply with the global trend. Although the number of contract awards globally increased by 3%, the value of these awards declined by 8% compared to 2005.
Arno Franz, Managing Partner of TPI Asia-Pacific, commented, "2006 was a stand-out year for outsourcing in Asia-Pacific. The region accounted for 13% of the global outsourcing market in 2006, the first time its market share has exceeded 10% since 2002. However, because the relative immaturity of the Asia-Pacific market makes it prone to spikes in activity, it remains to be seen if this is the start of an on-going growth trend."
Asia-Pacific is also showing consistent year-on-year growth in annualised revenues, the total revenues available annually to the service provider community. The Compound Annual Growth Rate (CAGR) for the region stands at 10.5%, more than double the global rate of 4.5%
Arno Franz continued, "Despite the 'lumpy' nature of the Asia-Pacific market in terms of yearly contract awards, the sustained growth in annualised revenues since 2002 suggests that there is strength in the Asia-Pacific outsourcing market."
At the same time, competition in the region has been heightened. The Big Six of outsourcing (Accenture, ACS, CSC, EDS, HP, IBM) are winning a decreasing proportion of those deals valued at over US$25M. This group won 40% of Asia-Pacific total contract value, compared with a 60% share in 2002.
Arno Franz concluded, "The increasing level of competition confirms that clients in Asia-Pacific are following the global trend and are becoming more receptive to doing business with non-Big-Six Providers. Alongside the global giants of outsourcing, there is clearly room for smaller, specialised service providers who can address specific client needs. As the market matures, we should see this level of competition increase significantly. At the moment, success for service providers in Australia, India and Japan seems to be the determining factor for success in Asia-Pacific."
订阅：
博文 (Atom)
