software outsourcing

A blog related to software development company and offshore software outsourcing

Thursday, December 15, 2005


A belief that the offshore outsourcing is causing unemployment and will adversely affect the country’s economic growth is like believing the earth is flat! Imposing ourselves to believe the untrue! Such myths in the offshore outsourcing companies are just fake ideologies prevailing around. But the policy makers or the unemployed or those who lost jobs, are bent on blaming their failure on the rising trend of off-shoring and outsourcing firms
Before coming to any such harsh statements and concluding the matter, it is essential to examine the facts of sound economy in order to remove the myth that does not allow the common sense to prevail.
The beliefs about security perpetuate themselves through companies and agencies. They’re viewed as gospel, and in many cases repeated from one expert to another. Most of the time these beliefs whether good or bad are never really put to the test. We believe them because we have often heard about them. In the process, these security beliefs have become myths
Here I would like to address you with some of the familiar myths going across the globe, though I have not tried to be personal, but I rather take the liberty discussing the issues:

Outsourcing Myths

Myth: Off shoring outsourcing is costing American and European jobs
This is absolutely false. The debate whether the American and European countries are running down of job and there is unemployment persisting in the US countries is not at all true. There has been survey done by the researchers that the whiter collar jobs when shifted or outsourced to other nations like India, China and developing countries like Dubai we get the work done at low-wage and professionals can be hired at low rate.
But it was the U.S. Technology which was boom in Informational Technology Outsourcing that has directly contributed to the viability of offshore IT outsourcing which will nowhere weaken due to such developments. It is true that some US workers will lose their jobs, but this painful reality does not weaken the case for free trade. These jobs are not lost due to offshore outsourcing, but as a result of changes in business and economic sectors. Our aim is to make the US labor force and economy more flexible and able to cope with the change.
Myth: outsourcing finance affecting governance and compliance
There was a detailed survey done for more than 200 finance officers and directors, conducted by the economic intelligence unit, and they found that the companies’ ability to maintain governance and compliance had prevented them from outsourcing finance functions. But we might be thinking how can outsourcing a finance function to a third party enhance governance and compliance through outsourcing? More than 70% of those offshore outsourcing companies said it helped them to define business processes more clearly and lead them to a greater clarity and accuracy of financial figures. The significant change in the mindset of companies that has decided to outsource will expect such a trend to continue.
The myths are however discussed earlier, but now let us come to the facts which is surveyed and tested and produced gains of offshore software outsourcing is worth a pool of fortunes!
The benefits are discussed as below:
Savings accomplished at Corporate
There is effective cost savings enjoyed by the US companies. Offshore workers are often highly motivated than US workers and perform better, with their wages being lower when comparing onshore, particularly in low-skilled jobs that lack prestige and suffer from high turnover in the United States. The call-centers and BPO sectors and many Informational Technology Outsourcing commencing India and other developing countries, offshore outsourcing India is providing technologies and implementation in high-value to offshore software outsourcing. Embracing economic freedom by free trade, free labor and free capital fuels- will bring about a stronger economic growth that if we are busy indulging in protectionist measures such as policy restrictions and regulatory hurdles.
Consumers enhance with deal
The researchers found that globally when the consumers benefit as companies by pass on savings in the form of lower prices, the sourcing of components has reduced the cost of IT hardware and software to various outsourcing companies. Offshore trade will add demand to many internationally renowned software and hardware products and buying those products by the offshore business is becoming cheap and is provided at reduced cost. Trade in services will have similar effects too. A software engineer in India will be able to deliver performance at low cost for life-saving technologies which will be available to every needy people. The onshore vendors can definitely save hell out of time to bring out the best.
Increase in productivity and commencing new jobs
It could be seen directly that the benefits of the American Economy will be twice of India due to new exports and cycling with profits to overseas. But all the gains don’t end there. Experience suggests that the corporate savings can be invested in new business opportunities such that the jobs on average will have greater value and this investment will boost productivity and create new job opportunities. Thus the unemployment could be matched at much higher rate by software outsourcing. There will great deal of help in other spheres like education, health services and hospitality, trade and transport and other financial service. As more and more BPO sectors commencing India, jobs in call centers, back-office operations, testing, and some other outsourcing IT functions, there is better opportunity to generate higher value job by redeploying labor and investing of the return capital. It is an ongoing process and will keenly enjoy the wealth and popularity with the growing days. It will definitely help the vendor and the provider to upscale their business with offshore outsourcing. High productivity means higher national income and high standard of living.