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Why Stay Here When You Can Outsource Offshore?

Aug 17, 2007
Companies specializing in IT (Information Technology) are increasingly turning to outsourcing their labor to developing countries in Latin America, Africa, Asia and the MidEast. The reason is reduction of labor costs, which can be as much as 50% lower in these developing regions than in a fully developed nation.

Companies that have specialized in Business Process Outsourcing (BPO) have found that their systems lend themselves perfectly to many segments of IT services. These services include the development and testing of software, data entry, data processing and help desk support. The IT company located in the offshore country will hire highly trained and expert professionals who are able to develop software in .NET, Java/J2EE, telecommunications applications, database solutions and smartcard solutions, just to name a few. The engineers and other professionals who perform these duties can either be full time employees of the offshore company, who move from product to product depending on which customers the outsourcing firm has, or they themselves may be hired on a contractual basis.

It is not only large IT companies with sizeable projects that turn to outsourcing as a cost effective solution. Small, individual IT jobs can also be outsourced to an IT professional. India is by far the most popular destination for outsourced IT demand, especially from the United States. In one city in India alone, Bangalore, there are 100,000 workers working on software development, chip manufacturing, computer operating systems, etc. Even though these employees make less than $7 per hour, they are highly trained IT professionals. Outsourcing such as this benefits the economy of the advanced country in cost savings, as well as the economy of the developing country by adding income.

The entire IT industry is a rapidly changing one. Outsourcing companies that deal with IT projects must work at staying on top of all new developments in IT technology. This requires constant training and re-training, sometimes at the headquarters of the company that hired them. Business PRocess Outsourcers make sure to hire their employees from a highly qualified, English fluent labor pool, and maintain and upgrade their training on a constant basis.

In order to compete in a global economy, IT companies must outsource to stay alive. If a company chooses not to outsource for political reasons or supposed loyalty to their country, they are making a grave mistake. They essentially are choosing to take on more expenses then their competitors and in turn may be driven out of business. This is particularly true in slim margin businesses. What would be worse for their country, a company with a certain percent of employees offshore or no company at all?
About the Author
MJ Batta writes job outsourcing related topics and hosts a job outsourcing research site at Outsourcing Research and a special outsourcing report at Outsourcing Jobs
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