| urcing is the delegation of tasks or jobs from internal | | | | To minimize encountering these types of problems, the |
| production to an external and separate business | | | | user company should find a suitable service provider in |
| partner, very much like a subcontractor. By present | | | | the process. The culture, especially on communication |
| standards and definition, it became the equivalent of | | | | styles should be similar. Providers’ suggestions |
| elimination of local staff in favor of staff overseas to | | | | on process improvements should be heard as they |
| countries where salaries are considerably lower. | | | | are considered the experts in their line of work. The |
| Countries such as India, Bulgaria, Venezuela and Brazil, | | | | company should be able to define and develop |
| among others have become forerunners as | | | | communication methods as well as problem escalation |
| outsourcing venues. | | | | procedures to guide the provider. |
| It was first seen in the data-processing industry and | | | | Service providers on the other hand, should learn to |
| has steadily spread to include telemessaging and call | | | | recognize the customers that are right for their |
| centers. Recognized as an effective means to save | | | | business. They should also ensure that communication |
| money and improve quality, outsourcing has also made | | | | styles are compatible with the user company. They |
| it possible for a company to free its resources for | | | | should also have adequate empowerment to swiftly |
| other undertakings. Functions that have been | | | | resolve minor issues. |
| previously performed by a company are supplied | | | | A healthy outsourcing relationship results from the right |
| under contract from a third party. Goods or services | | | | attitudes of both parties. By being open and honest, |
| are bought instead of producing them internally. | | | | costly surprises are avoided on both sides. |
| The process may require the transfer of components | | | | Responsibilities for both success and failures are |
| or large segments of the internal IT infrastructure of | | | | shared by analyzing jointly individual contributions to the |
| the company to an external source as well as staff | | | | problem so as to avoid the same mistakes. |
| and other applications. Since it usually applies to a | | | | Many outsourcing contracts have gone sour since their |
| complete business process, there is a degree of | | | | inception. Some ought to be examined very carefully if |
| managerial control and risk on the part of the provider. | | | | it is worth continuing at all. A bad relationship hurts both |
| A long-term and results-oriented relationship is | | | | the service provider and the outsourcing company, |
| expected to be achieved for tasks that each one | | | | affecting performance and productivity to the |
| cannot effectively accomplish on its own. | | | | detriment of both. |
| An initial outsourcing contract would include the actual | | | | Major world players in the outsourcing business |
| cost of outsourcing and the cost of relations | | | | continue to change the face of the marketplace. India |
| management. Items such as pricing, reporting methods, | | | | continues to hold its leading position and user |
| definition of service level and delivery are the most | | | | companies are more inclined towards enlisting Indian |
| visible portion of the cost. However, there are other | | | | partners to revamp business processes. Brazil has its |
| things such as understanding each other’s | | | | time zone which is only about one to three hours late |
| objectives, building trust and respect and developing | | | | than New York. Its culture is even more similar to the |
| open and honest communication that comes into play. | | | | US than other existing service provider countries. |
| When any of these items is out of sync, costs | | | | Software developers from Bulgaria have been rated |
| automatically increases, negating whatever savings is | | | | as one of the best IT experts during the last decade. |
| expected from the outsourcing contract. The more | | | | Venezuela has the labor cost advantage. Whatever |
| items related to relationships between the company | | | | outsourcing venue is chosen, the major considerations |
| and the provider that is not in complete harmony, the | | | | are expertise, scalability, speed-to-market and cost |
| more expensive the outsourcing contract becomes. | | | | efficiency. |