Archive for September, 2009

Outsourcing Trends for the Nearest Future

September 4th, 2009

Outsourcing, as the global business tendency, can be predicted as any other business process according to the current economic climate and prospective changes. On the basis of these predictions and the today’s state of the BPO market it is possible to outline some outsourcing trends for the nearest future.

Outsourcing companies’ consolidation

The fierce competition on the outsourcing market driven by the flattening economy will cause the consolidation on the global outsourcing market as many offshoring companies are ceasing to exist while more suppliers are emerging. Industry experts foretell merging of outsourcing companies and the acquisition of smaller ones by bigger players.

Outsourcing business globalization

The number of the countries offering effective outsourcing services is rising. By recent, India and China have been the main outsourcing destinations. However, recently the countries of Eastern Europe, Brazil and Mexico have joined the outsourcing race and now are considered very serious competitors of India and China. The growing number of the players on the global outsourcing market inevitably leads to the narrower specializations of outsourcing. This specialization will help smaller players distinguish themselves on the global outsourcing market.

Outsourcing will be closer to home

Outsourcing market globalization is assisting companies in outsourcing closer to their homes and obtaining better communication and better project management opportunities. Outsourcing destinations that include India and China will be challenged by the locations that are closer to US and European companies.

outsourcing destinations

Shorter outsourcing contracts during the recession

In this harsh economic climate when many businesses are forced to leave their markets, companies are striving to seek shorter outsourcing contracts that provide more space to adjust volumes and service level terms.

Personal offshoring (P2P offshoring)

Offshoring is normally associated with big and middle-size businesses. The new trend in outsourcing evolves person-to-person offshoring, when outsourcing services are provided by individuals. Often these services are associated with freelance services. Such services don’t require team engagement and can be done by a single professional. These services may include but not limited to:

- Web design
- Web creation and maintenance
- SEO
- Copywriting, editorial and translation services
- Online tutoring services
- Marketing services

Green IT outsourcing

With the rising concern of environmental protection more and more companies today include the paragraph of environmental protection into their outsourcing contracts. Moreover, environmentalism is becoming a real trend in the world of IT outsourcing and now is often treated as the quality evaluation criteria.

Outsourcing services integration

More and more businesses prefer to work with outsourcing companies that offer complete packages of outsourcing services. That helps prevent from spreading different isolated businesses tasks to several offshoring companies. Thus, the prioritized companies will be those that can deliver all aspects of outsourced processes in one service package. Web development is the simple example. As a rule, IT outsourcing companies that specialize on web-sites creation also provide web-design services, maintenance and SEO for their clients.

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Tips to Avoid Possible Risks of Outsourcing. Disadvantages of Outsourcing

September 2nd, 2009

The advantages and the importance of outsourcing these days are simply obvious. There are many reasons why businesses, notwithstanding their size and budgets, consider outsourcing. Some businesses, especially small ones, very often simply have no choice but have to outsource some of their business processes. However, there are some risks and disadvantages of offshoring that have to be considered. Of course, much depends on the company you’re dealing with. As a rule, the better the reputation of an outsourcing company, the fewer risks you may face during the collaboration with them. Let’s try to outline some possible negative aspects of outsourcing than can be potentially encountered.

calculate outsourcing risks

- When offshoring and trying to save money, don’t overdo it: verify particular business processes that can be done by yourself rather than outsource them.

- Always remember that with outsourcing some of your services the portion of your very confidential information will be known to the outsourcing company you’re working with. Always consider the security of your confidential data.

- There’s always a risk that your offshore service provider may become bankrupt automatically leading to troubles, extra spendings and waste of time searching for another outsourcing provider.

- Managing offshore provider is always much more complex than managing business processes within your organization. Remember, that the outsourcing company you’re working with may be responsible for several projects of different companies, thus there may be not complete devotion to your project.

- Remember about the hidden costs when signing a contract with your offshore provider. The initial costs and final costs often differ.

- Remember, that such factors as contract misunderstanding, renewing contracts, lack of communication and delay of the services often accompany the outsourcing process.

- Never neglect your customers. With outsourcing your company may suffer from a lack of customer focus. For instance, if you outsource the service that used to be done on your site, some of your customers may feel embarrassed that you no longer perform this or that service and reject it. Take the interests of your customers before starting outsourcing.

Always remember about your in-house employees!

- Many of your employees may not be happy with the fact that some of their duties are being outsourced. Nobody likes feeling that their skills can be replaced and as a result they may show the lack of interest to their work and that may cause the harm to productivity. When consider offshoring never forget to cater to the needs of your own valuable employees. If not, outsourcing may lead to redundancies for your company. Take the interests of your employees before starting outsourcing.

There’s a well-known adage that in business you get what you pay for. A quarter of all outsourcing contracts are never renewed. You may not experience any of these disadvantages of offshoring if you’re working with a trusted and respectable outsourcing company.

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