shore outsourcing is a topic that divides the world in two camps.
A lot of dust has been raised on this issue in the past. Even
with reams of paper written and high decibel voice lending support
to either side it hasn’t changed the principles of business.
An emotive approach can behold logic for a short period, however
it is rationality that prevails in end and makes the world move
on. Offshore outsourcing is one such rational way of carrying
out business profitably in this globalized world. It is a mega
trend that can steam roll any opposition driven by its huge advantages
of offshore outsourcing
Some of the main advantages of outsourcing
are the opportunities to tap into larger talent pools of
human resources at a lower cost. It helps improve the process,
increases productivity and scales up the operation at a much
faster pace. It also offers a cost effective option of overnight
turnarounds (India has the strategic advantage of the geographic
time difference of 10-12 hours with US and 5 hours with Europe).
Outsourcing allows the companies to concentrate on their
core strengths and stay ahead of competition.
Complete Outsourcing: This
is the most popular and cost efficient model, also known
as third party outsourcing. Here the vendor carries out the
entire outsourcing job from cradle to grave. This process
scores over the other models by providing improved economies
of scale. It also offers better technologies along with inherent
incentives of process improvements.
Captive Operation: In
this model companies set up their own offshore unit at an
overseas location. Here, the process control remains in-house
and process knowledge is retained by the organization. This
is best suited for companies where data privacy is a major
concern. However, assurance of data security comes at a higher
cost than the third party model. Captive centers being an
extension of the mother Company are slow to change and easily
inherit their inefficiencies.
Hybrid Model: The
Hybrid model through joint ventures has best of both worlds.
It combines the best of domain knowledge, inherent incentives
of process improvement a significant cost advantage, where
process and work methods can be designed to deliver the best
In the current globalized world, market forces write the
rulebook of business. Offshore outsourcing is one such
rule, evolved from highly
competitive market. It has now become a necessity for any business
to remain competitive, now and increasingly so into the future.