Seventhman Blog

  1. Outsourcing and Job Creation: A Two-Way Street!

    "outsourcing"I have always wondered if the world today can survive without outsourcing and if it can, just how will the economy look.  Last year, I have asked a couple of folks if they think that outsourcing is a one way street ( see responses here ) and I’m amazed at the clashing insights I have received, and each answer has a point to make.  It’s pretty much obvious that the term ‘outsourcing’ is still a misnomer for many and the debate over this topic grows with favor ( and disdain ).  It’s not really a question of how emerging outsourcing destinations can become more attractive to investors, but more of a question on how to get jobs back to the U.S. – and if the latter is even possible to start with.

    Outsourcing: The Beginning of a One-Way Exodus

    Like many people who have asked the same question, they are inclined to think that outsourced jobs aren’t coming back, that unemployment rate will soar higher.  This may be said in the manufacturing industry where we see factories shut down and work is outsourced offshore to cut down on costs while staying competitive.  Should we blame the demand for a faster, cheaper and better product these days?  When customers demand the best value for the best price, most often, sacrifices are made and for this reason, repetitive tasks ( and a large number of it ) are outsourced and may never come back.  It’s simply a play of numbers, where lower wages and operating costs in developing countries tip the scales.  More American workers are out of work while outsourced work is reaching a saturation point. Before, it’s only low-skilled jobs which are outsourced overseas but now, we are experiencing a loss in intellectual capital as highly-skilled work is sought outside.  Is it lack of talent onshore that finally drives businesses to seek skills offshore?

    A Peek at Outsourcing’s Controversial Loophole

    While many fear that jobs won’t be coming back, there are those who say that offshore outsourcing is a two-way street.  In this age of globalization, many firms are doing businesses across the globe and this means creating jobs in first world countries too.  Just take a look at India’s Infosys with onshore facilities in the U.S.  Then, there are multinational firms who are insourcing as they do outsourcing.  Small businesses have also reaped rewards in finding help offshore so they can grow in a competitive market.  Not only can they control capital costs and increase productivity while reducing labor costs, but outsourcing helps them focus on their core business so they can start on new projects much faster than before.  Yes, there were failures along the way and yet, many are transforming their business model in a flat world.

    It All Comes Down to Cost, Quality and Time

    Going back to the question if outsourcing is a one-way street, I’d rather say that it isn’t.  In the end, it doesn’t matter where you source, for whatever investment is made will always come back in new forms ( jobs, companies, business opportunities ).  Perhaps, western media may be biased in educating people about facts where matters of outsourcing offshore is concerned.  Besides, there are other reasons why companies outsource and it is directly proportional to attrition rate.  We  should also be asking why people change jobs too.  Let us start asking ourselves how we can deliver the best service, a class-A quality product… in the shortest time at the right cost to satisfy our customers instead.. What do you think?

  2. The New Way of Doing Business

    With the economic recession pushing many businesses to outsource, many are faced with the exciting prospects of global outsourcing in the new world economy.  Those who are already in the outsourcing world knows that there will always be new opportunities and challenges to be faced.  The global marketplace is shifting towards hiring virtual teams from all over the world, cutting down on huge costs brought about by doing business the traditional route.  As the year opens to a new hope, there is also a greater demand for quality and value at lower costs.  This and more will be addressed at the  Outsourcing World Summit to be held by the International Association of Outsourcing Professionals ( IAOP ).

    FACT: Several industries in the US have permanently shifted to offshore outsourcing to fuel their businesses.  No one is immune to this trend and many are jumping into the bandwagon for the sake of minimum costs with the extra benefits.

    What Global Outsourcing Trends Should You Watch For?

    1.  Focus on Value

    Unlike before when there is a huge demand for the lowest hourly rates, businesses are now more results-oriented, where value or quality matters.  The rise from last year’s economic slump means stronger finances and the ability to pay for better services.

    2.  Flexible Deals

    There is still uncertainty in the global economy and many businesses will play it safe by engaging in short-term, flexible contracts.  The fear of the unknown still lingers.  From the point of service providers, this uncertainty will force partnerships or teams to be created, where offers will definitely be competitive.  There will be various pricing models that will meet the needs of both businesses and remote workers alike.

    3.  Increase in Hire

    Since many small businesses will join the global outsourcing arena, many remote workers will be hired from locations outside the United States.  We can see the rise of new outsourcing locations such as Central America, South America, and China.

    4.  New Technologies

    As businesses try to bridge the gap between geographical borders and time zones, newer technologies and tools will come into play, giving better communication and computing services for both clients and service providers.

    5.  Paradigm Shift

    With the increase in global outsourcing practices comes global corporate and social responsibility.  Governments will be forced to toughen regulations in outsourcing to ensure that fair business practices are met.

    6.  Tougher Competition

    Doing business globally opens a huge list of competitors in the market.  With the emergence of new global outsourcing destinations comes tougher competitions based on services and rates.  There will be an increase in professional certifications and training programs that will make any service provider more valuable than the rest.

    7.  Better Quality Metrics

    Unlike traditional outsourcing that is based on performance metrics, there will be more transparency in the way business will be done.  There will be better ways in measuring the value a business gets from offshore or outsourced teams, which will help resolve issues before and during the project work stage – and not after results are completed.

    Nothing is ever constant in the world of global outsourcing and by watching out for the latest trends, you put your business a step forward, above the rest.  One thing’s for sure:  Competition will definitely increase.  Stay Vigilant!