Do you think outsourcing is overused?

This is exactly what Joe Tucci, Chairman and CEO of EMC Corporation thinks about outsourcing.

This is what the CEO has to say in this kind of business strategy:

"I think outsourcing is an overused word. I think what you are going to see more of is companies willing to outsource a business process. So, for instance, in EMC we outsource all our payroll, but we outsource the entire process, not just the IT process. So I think you are going to see a lot more of that. I think you are not going to see wholesale take everything. I think that market is slowing down."

I totally agree with Joe Trucci is saying because not all companies could benefit from outsourcing and outsourcing everything does not necessarily solve everything. It would be benefecial if "selective outsourcing" would be implemented. This means that only tasks that are eligible for outsourcing should be outsourced hence the good outcome.

The issue regarding outsourcing manufactured work in China is still considered a very delicate issue because of the effect that it could have especially to children.

This report entitled Outsourcing, Regulatory Sloth Blamed for Unsafe Toys emphasized on this issue stating that:

"The mass outsourcing of manufacturing to China and other nations with low safety standards, combined with the rollback of consumer protections and gutting of regulatory agencies such as the Consumer Product Safety Commission (CPSC), has directly led to the explosion of "toxic toys."

Of course, this issue would not be cleared because of there are still people questioning the standards of outsourcing in China. Unless provisions and regulations would be implemented, this issue would not die.

Outsourcing is growing and one thing that could contribute to its growth is VoIP (Voice over internet protocol).

The emergence of such technology is considered as a factor because of the convenience that such technology brings especially when it comes to call centers. Here is a brief explanation about this conclusion:

Innovations in broadband and communication technologies have meant that firms looking to save on space and costs can outsource their secretarial services with much greater ease than before.

Do you think that VoIP do contribute in outsourcing?

The Philippines have exceeded its outsourcing prediction.

This was the general view of the research report conducted by the advisory firm XMG. According to the report, the Philippines could experience an annual growth rate of 62% thus surpassing the outsourcing growth expected in other outsourcing countries such as China, India, and Malaysia.

Different factors which could attribute to this trends was also mentioned in the study stating that:
"The cost of operations in top outsourcing destinations is increasing due to wage hikes needed to retain good people, coupled with rising real estate prices and the effect of accelerated currency appreciation in Asia."

I think that the Philippines also possess qualities that every outsourcing destination has. The only problem here is the marketing strategy that these countries have. In this department, countries should think of suitable and attractive ways to attract clients so as to promote their country in the world of outsourcing.

Erratum: I originally wrote that the study was done with ICT. I would like to correct this mistake because the research was conducted solely by XMG. Apologies to any inconvenience that I have caused.
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Outsourcing was identified as the culprit which hinders the IT growth in countries which opt for outsourcing.

The research study done by Gartner revealed that half of the more than 150 CIOs surveyed indicated their companies were going to outsource IT. These outsourcing plans could hinder the impending growth of IT outsourcing because most of the tasks are being transferred outside the country.

Andy Rowsell-Jones, the research director of Gartner issued this statement regarding this trend stating that: "Running many IT services has become far more transaction-based, as if it has moved from brain surgery to producing soccer balls. Software for something as complex as a global supply chain is now coming out of a box - literally."

I think that this is not a big problem especially if the company would develop a strategy that would benefit both their outsourced deals and their in-house operations.

Contrary to reports showing that outsourcing is dwindling down, a research report shows that outsourcing deals are indeed growing and actually have reached the status of "mega deals".

Here is an interesting excerpt from the research study done by Forrester:

Results found that 84 deals in total were closed in EMEA during the second quarter worth over €5.4 (£3.8 million), which is 19 more deals than in the same period last year.

IT infrastructure deals accounted for 45 per cent of all outsourcing contracts and help desk and support services also increased substantially, making up at least 44 per cent of the contracts.

Surprise findings came from the Nordic countries where Sweden, Finland, Norway and Denmark closed 14 deals together, reflecting the "high outsourcing maturity" of this region.

If this research study would be the basis, you could see that Europe continues to embark on outsourcing. I guess it just means that they are satisfied with this kind of business strategy and would continue to invest in it.