Becoming an Outsourcing Destination
If you've been reading this blog for quite some time, you might notice a post every now and then talking about a specific country that wants to join the outsourcing industry.
So far, India is considered as the leader in the said list and many others not far behind. When I speak of others, this means countries such as Philippines, China, Chile, Argentina, Malaysia, and a whole lot of other aspiring countries. You also might be wondering on why these countries were considered as outsourcing/offshoring destinations.
Well, based on my personal observations and research, an outsourcing destination should have the following qualities:
-vast supply of available and skilled workers
-lower salary rate
-able to support advance technology equipments
-could comprehend the English language
Are there any more qualities that I missed? If there are, please do add them.
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Another important consideration for outsourcing is domain competency. For example, if 95% of your product orders are going to be handled by an outsourcer, they’d better know order management inside out. Or, if 80% of a bank’s application development is going to be done by an outsourcing company, the company better be fluent in regulatory compliance requirements for banking industry.
Also, when outsourcing to destinations across the globe was in its infancy, basic technological, language and cultural literacy was sufficient. But these days it is also important that the outsourcing destination not only be good at basic skills and project management but also have enough competency to act as advisors to the relevant business function. In fact, as execution becomes commoditized, this advisory capability is becoming the differentiator among countries and companies.
Some of these ideas have been detailed out further at: http://www.infosysblogs.com/thinkflat/global_sourcing/
Comment by Richa Govil on October 31, 2006 4:38 am
Another important consideration for outsourcing is domain competency. For example, if 95% of your company’s revenue is going to be handled by an outsourcer, they’d better know order management inside out. Or, if 80% of a bank’s application development is going to be done by an outsourcing company, the company better be fluent in regulatory compliance requirements for banking industry.
Also, when outsourcing to destinations across the globe was in its infancy, basic technological, language and cultural literacy was sufficient. But these days it is also important that the outsourcing destination not only be good at basic skills and project management but also have enough competency to act as advisors to the relevant business function. In fact, as execution becomes commoditized, this advisory capability is becoming the differentiator among countries and companies.
Some of these ideas have been detailed out further at: http://www.infosysblogs.com/thinkflat/global_sourcing/
Comment by Richa Govil on October 31, 2006 4:42 am