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Current Trends in Offshore Outsourcing

Jan 19, 2008
The Internet is an ever evolving tool. It is vastly different from where it was five years ago. The frontiers of technology have been conquered and new horizons are being pursued; growth has been achieved and there are still different strategies being devised to deal with the trends in the market. In addition to that, online networking process and communities have sprouted everywhere and outsourcing has become a major industry utilizing the Internet.

Small and medium businesses, even large scale enterprises have recognized the Internet as an important component in developing their business strategies. Not only that, because of the integration of the Internet in the business processes of various companies, offshore outsourcing for IT and for other business processes have become the norm nowadays. Although, there seems to be no stopping for these trends, it would be important for businesses and for professionals; too, to foresee the directions that offshore outsourcing is taking so that new strategies can be devised to deal with these matters.

Offshoring simply means the relocation of various business processes to other countries or location, usually to one that has cheaper labor costs. Due to this process, secondary operations are now being transferred to outside actors, thereby streamlining the processes of the business and focusing on the most important processes of the business. In any cases, multi-sourcing is an option that most companies are taking. Under this scheme, different vendors and providers are contacted to provide services for the purposes of making sure that the best services are secured. Several countries are being targeted for multi-sourcing strategies of multinationals. Among these are India, the Philippines and China.

There have also been mergers and acquisitions in the industry because of very intense competition. As a result, the resources of outsourcing companies have been used together by these mergers and acquisitions. Indias place in the outsourcing industry is also declining. As such, markets such as that of the Philippines and China are on the rise. Consultation and strategic planning, nonetheless, is still needed so that the competitive advantage of companies is maintained and that they will continue to show robust performance in the global economy.

In this ever-changing landscape of the Internet, offshoring has shifted to a person-to-person approach. In addition to that, most of offshoring are now in the area of redeployment instead of starting new ventures or branches in other countries. This is partly because of the infrastructure and different situations in the environment of the receiving country.

Offshore outsourcing has greatly benefited the economy of India and of the Philippines. It should be remembered, however, that the cheaper labor cost is the usual reason for offshoring and in the coming years, as the labor of Indians and Filipinos rise, then the preferred countries for offshoring may change. The flip side of the coin is that there is an increasing job problem in the United States and other countries that are offshoring services. Because of offshore outsourcing, companies has learned how to manage their resources better, save costs on labor, and ensure quality work at the agreed upon time, thereby leading to greater profitability and better performance.
About the Author
James Stinson is Owner and Founder of Global Sky Inc. He employs a team of 50 in a high quality call center facility based in the Philippines. For more info on outsourcing your project visit: http://www.global-sky.com
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