Considering Offshore Outsourcing

Today's business world is marked by changes, complexity and the need to rapidly adapt to new market demands without loosing momentum on strategic objectives.  Along with the globalization and maturity of technology product life cycle, enterprises are continually looking for effective solutions that will catapult them ahead of their competitors. Outsourcing non-core activities frees up capital for a firm to concentrate on its core business and to increase agility of its operation.  Outsourcing is therefore increasingly being used by enterprises as a tactic for gaining competitive edges and direct focusing on their core competences.

Outsourcing delivers a wide array of benefits that help enterprises succeed in the global competitive marketplace. These benefits include:

• Agility to manage customer expectations
• Fast Time-to-Market
• Extended market coverage
• Lower and more predictable operation costs
• Diverse expertise & resources
• Improved productivity
• Continuous business process improvement
• Access to latest and best technologies without capital investment

We can see the impact of outsourcing is expanding. Outsourcing was viewed as an intervention in early 1990s. Companies outsourcing tasks to ad-hoc teams and outside experts simply aim at cost savings. From late 1990s to early 2000s, outsourcing was treated as a tactic to improve business process efficiency and to better focus on core competences. From 2005 onwards, outsourcing will become a company's strategy for achieving sustainable value and business results.

Many industry-leading companies like Procter & Gamble, Nokia, Ford and Aventis already noticed the crucial role of outsourcing and have started to outsource some of their business processes to better focus on their core businesses. Outsourcing non-core business processes is now a global trend and its market is expanding rapidly. According to Gartner Research, the global market for Business Process Outsourcing (BPO) revenues will be around US$600 billion by the year 2008.

According to the Everest Research Institute, although BPO is the new baby on the block in the outsourcing world, it already accounts for more than a third of the entire outsourcing market. In 2005 the USA outsourcing market accounts for $362 billion, and BPO accounted for $129 billion or 36 percent of the total outsourcing market size.