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. Drawbacks of IT Outsourcing Revealed

    "IT outsourcing"With the sluggish economy and ceaseless debates around the subject, one can only wonder what outsourcing in this age of uncertainty really means.  Every company these days are trying to make ends meet on nearly every level, where they strive to bring value to their business.  While outsourcing may have been blamed countless times to the cause of unemployment, let us not forget that outsourcing is merely a business strategy helping an organization, large or small, survive and thrive .  To maximize productivity and minimize cost is not an easy fete, but it doesn’t mean a perfect solution either.

    Realities of IT Outsourcing You Need to Consider

    Despite the fact that IT Outsourcing is growing each year, even in places like China where English skills need to scale higher, many are still outsourcing some or most operations run by their IT Departments.  Whether be it a permanent or temporary fix to bridge the gap among cost, quality and manpower – outsourcing may seem like a salvation to many, that is if you are not too overeager to miss the real cost of outsourcing IT.  For example, if you are to move your IT functions offshore, you need to consider travel cost to the country of your choice, not to mention, other costs that may involve directly ( or indirectly ) with running your operations there.

    Calculating Beyond the Real Cost

    While you may think it will cost you less in the long run to get a third party service provider, you may have to consider the time factor when it comes to their familiarity with how your system and network really works.  If not, that can mean additional costs in training.  Then, there will be cases when you need something done a.s.a.p. and your outsourced IT provider must be inept to deal with issues right away, or you can suffer delay time which is not really good for any business.  Whether you’re outsourcing locally or offshore, you have to consider the worst case scenario to prepare yourself for the unexpected, just in case.  The problem is that plenty of contracts are sugar-coated and misleading, and no matter how urgent your needs may be, it helps to see a bigger picture that includes the real cost + long term benefits of having an outsourcing partnership.

    Outsourcing the Human Liability

    What drives companies to outsource these days is having access to first-rate IT expertise and resources that will yield more results and cost less.  Still, one must consider that anything, or anyone, can become a liability.  It does make sense to have your fine print well-defined, as well as backups, in case data is lost or stolen.  Yet, the question here is how much will it cost you when downtime happens because of these?  Will it cost you more if your team hasn’t worked for an entire day ( or week ) because the system crashed?  Is your team motivated enough to continue with your cause, efficiently?  Have you even considered the impact of cultural barriers that may lead to communication gaps?

    You may argue that any business is a gamble and it comes with risks.  Keeping a close eye is just a start and no matter how providers may offer free consultations, it’s only a sales pitch.  It will always come down to long term benefits and what outsourcing will really cost your IT dollars.  Choose wisely!

  3. Outsourcing in the Age of Uncertainty

    "outsourcing"As businesses are becoming more dynamic these days, not only a global mindset is called for – but a move towards leadership and resiliency in this age of uncertainty.  Yes, we are living in times when change happen in a blink of an eye and where there is danger, there is also a hidden opportunity waiting to be discovered.  Outsourcing has never been the enemy here and what is lacking are innovative strategies and planning that will help businesses become more competitive, no matter where they are located in the world.

    An Open Invitation to a Better Outsourcing Relationship

    What makes a winning outsourcing relationship these days?  The key may lie in our flexibility and willingness to invest in expertise that will make things work for our business.  If both parties are open and honest, it will pave the way for problem-solving scenarios that will create positive results for both clients and outsourcing service providers alike.  If there is an issue of trust when the economy is barely recovering, perhaps, both parties can meet halfway in addressing needs and resolving issues to set expectations right in the first place.

    This will then lead to this personal sense of accountability where there is just this initiative to create solutions for the success of the outsourced project.  It’s a chain reaction, with the benefits, if you would like to call it as such.

    Learning to Survive in the Outsourcing World

    There have been recent fears about Obama’s outsourcing bill that can have significant effects in major outsourcing hubs like India and the Philippines.  If this is viewed as an opportunity instead, where helplessness is transformed into power, one can survive this by seeking out new and unexplored terrains where outsourcing can still thrive.  There is a shifting trend to insourcing once more, where clients are wanting to bring back roles in-house.  There will be short-term gaps in contracts and yet, if one will commit to improving the quality of service, processes and managing business cost – one can still compete in times when businesses are looking to add more value, without adding extra costs.

    If there’s going to be a slowdown in outsourcing in the coming months, what we can do for now is see this niche in a bigger picture.. so we can have better visions of the present situation that will help us address it in the future.  Will sending more work to outsourced providers result in a mutually beneficial business relationship?  In the end, change is constant and just how you respond to it makes a huge difference in the world.