Friday, January 7, 2011

Outsoucing Business In India



“Self sourcing” or “In sourcing” are the terms to describe when a product or service is produced within or by any organization. The most popular and simple definition of outsourcing : ‘to procure the product or service instead of producing it by itself.’ Generally every organization uses it by one or the other way to achieve its target. For example, a cell phone company requires a variety of chips and batteries and chargers . It needs lots of small parts to make a cell phone. Rather than manufacturing chips and batteries itself, the company can use outsource the production of some parts to some other company that have specialization in making chips or chargers or batteries. Such outside companies that provide the outsourcing services are commonly known as ‘service providers’.

Outsourcing is most common nowadays. Many firms or companies prefer to outsource the whole operations to other firms or companies. Internationally organizations look for facilities like Accounts, Data entry and Payroll and billing which they can outsource. These outsourcing service providing companies are known as BPO and Information Technology Outsourcing (ITO). Numbers of advertisements that appear in news papers are of outsourcing only. Organizations nowadays prefer to outsource than to manufacture a product themselves because quality control is possible even indirectly. These service providers are proved as blessings and the result is that their business is now growing up fast by concentrating on important aspects of production and /or marketing.

Outsourcing business mainly includes call centre outsourcing, Human Resource Outsourcing, Accounting and Finance Outsourcing. Initially they go for a yearly contact than after looking at their performance the contract is extended. They pay to the client company hundreds and thousands of dollars. For instance some firms like IBM,HP, ACER etc are the leading outsourcing service providers in Information Technology.

The success of the outsourcing company is mainly based on the client company’s abilities of the staff, communication between the provider and the receiver, client’s ability to handle its service provider. If these three things are managed well the target can be reached faster.

India’s Prime Minister recently said that, ‘India is not in the business of stealing jobs from the US. India’s outsourcing industry has helped to improve the productivity of American industry’. The figures of outsourcing business between the two countries prove the statement clearly.

The advantages of the outsourcing business are remarkable. Cost saving is the biggest advantage of outsourcing. As a company can reprise, re- negotiate and reconstruct the whole cost. There is a difference of industrialized or developed and developing nations. Developed nations give business to developing nations, so they can hire them at lower cost. They can focus on their own core business is the second advantage. They can save their time and energy to some specific work is the next advantage. They can hire the companies or the organizations who are masters of that particular work. Thus the word expertise is redefined with economics of out sourcing. So, they get best available by spending the same amount. And this is how they can improve their quality. While in-house this can be a costly affair.

OUT SOURCING is thus a proven strategy for conducting a profitable business. AND India as a nation which has effectively and successfully provided out sourcing services to many businesses and companies internationally.


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