Why?Outsourcing is no longer only about cost saving but it has also emerged as a strategic tool that may influence the 21st century international economy. For example, 1000 British Airways jobs were sent to India save $23 million. This resulted to divert the outsourcing savings helping employees in job transitions. Now, global leaders don’t project outsourcing as a plain business tactic but essential to stay competitive on the world platform. Today, companies not only outsource their vertical businesses but the new cross-functional approach follows a process across the organization- Business Process Outsourcing. Based on strategic alliances, companies seek strategic advances. On the other hand, persistent move to operate more efficiently is the key behind outsourcing.
Outsourcing is all about understanding your business’s uniqueness. If you identify your core competency, you can consider that the work you are doing could be performed better by others. Core competencies include essential areas of an organization. For example, Microsoft’s core competencies include product development, product design and marketing. If Microsoft stops engaging their resources on non-core competencies, it will probably operate more efficiently.
To know why companies send their operations thousands miles away, do the math. An architect based in U.S earns $3000 a month while $250 in The Phillipines. A U.S based Java programmer earns $6000 a month while $5000 annually in India. Despite the savings, the quality is not hampered. Actually, why companies move their functions offshore is to get a better quality. As an example, call centre can be cited as the best example. Call centers depict how offshore outsourcing can enhance the quality. In Asia, call center jobs are seen as highly esteemed jobs. While in the Western countries, it is considered as a low profile job.
Here are some of the top reasons to outsource IT:
- Operating Cost: Outsourcing eliminates various costs associated with hiring an employee like training, insurance, retirement plans, taxes etc.
- Enhances Focus On Core Competencies: Outsourcing lets you concentrate on core areas.
- Access to Exceptional Skills: The collective experience of IT professionals offers a wide array of knowledge.
- Engaging Internal Resource For Other Purposes: Outsourcing facilitates by engaging employees in their competencies instead of deploying to work on non-core competencies.
- Internal Resource Not Available: If you don’t have a resource who can manage IT services, and hiring a new employee does not fit your budget, then outsourcing is the best option.
- Restructuring Benefits: While restructuring your company, some non-core competencies may be ignored. However, in that case, outsourcing proves to be an optimal way.
- Funds Usage: By outsourcing non-core functions, you can spend your funds where they are actually needed.
- Reduce Risk: It is important to keep pace with the emerging technology changes. The outsourced professional IT service provider is competent to offer you the best market practices. Their rich experience reduces risk of practicing a wrong decision.