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What is offshore outsourcing

what is offshore outsourcing

Outsourcing is the new buzzword rocking the global economic environment. Offshore outsourcing has changed the way business is conducted today! Every businessman today, welcomes any information on outsourcing. More and more organizations are utilizing various resources of outsourcing to gain business advantage.

Outsourcing is a business activity through which business firms attempt to reduce or eliminate its non-core areas of functioning. In simple words, outsourcing is based on the principal that no organization can perform all of its activities optimally and with same efficiency as others.

Every business firm irrespective of its size has to undertake various business activities or processes in order to achieve its targeted objectives. Each business activity consumes certain resources of business. A business process that consumes more resources will reduce the overall profitability. A firm will detect such high consumption activities by comparing their output with its resources consumed. In order to reduce the resource consumption, business organization stops performing the activity that does not produce satisfactory output when compared to its resource consumption. The organization instead contracts with another entity that is better at performing that particular activity and would carry forward the same on behalf of the business organization

This arrangement would lead to lesser resource consumption and increase the competitiveness of the business organization. This arrangement is nothing but ‘Outsourcing’. Popularly, organizations that outsource their processes are termed as, client or buyer or outsourcer. And those firms that provide outsourced activities are know as service providers or vendors or supplier.

What is Offshore Outsourcing?

Offshore outsourcing literally means outsourcing your activity to one who is not on your shore or who is beyond your shore. Offshore outsourcing is a concept in which the buyer of the service

is located in some other country then the provider of the service.

Organizations are tempted to invest in offshore outsourcing resources because when compared to their own countries, certain nations have vast & easily accessible resources that can be exploited to gain competitive advantage.

Many developing countries are attracting business organization from developed countries because developing countries are providing quality services at economically cheap price in comparison to developed countries.Various issues affect the decision of a client regarding offshore outsourcing. Factors like manpower cost, manpower quality, and infrastructure facilities in a nation decide the attractiveness of that country as a offshore outsourcing resource location. Legal and business environment in the service provider’s country plays a major role in the development of offshore outsourcing.

Offshore outsourcing has revolutionized industry segments. Information technology being in the lead, offshore outsourcing is also helping many industries in manufacturing segments to gain competitiveness. Outsourcing offshore software development to countries like India, China,and Philippines are proving beneficial to the industries world over.

What is all about?
In the coming sections, we have looked in introducing: -
  • Process of offshore outsourcing – This shall help you to answer How to outsource?
  • Legal blockages faced by the business organizations in offshore outsourcing.
  • Business issues which a client should consider before deciding upon the service provider
  • In the light of India’s dominance over offshore IT outsourcing market, we have tried to highlight Indian IT revolution with specific attention to India’s capability in offshore outsourcing.

It should be noted, although we have made an attempt to encompass all possible points in the areas that we have covered, vast possibilities still remains to be explored

Category: Bank

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