Niyamath Parveez

The benefits of outsourcing have long been known and welcomed by businesses seeking an improvement in their financial situation but can the same be said for individuals? It would definitely make a lot of people’s lives easier if they were able to outsource the tasks they did not enjoy to other people although the cost of doing so may not be too good in this economic downturn. However, for those people who are looking for ways to make a little bit of extra money, providing outsourcing work for others could be a great way to smooth the difficulties in waiting for the next pay check.

The thought of doing the housework or dog walking may be a hard thing at the end of long and busy day but imagine if you were able to free yourself from these tasks. Yes, they would cost a little bit but you would find yourself with more free time and it’s what you could do with this that could make it all worthwhile. Having an extra amount of time on your hands could free you up to do far more lucrative or rewarding tasks and gives you a chance of improving your happiness or bank balance. Firms will consider outsourcing in order to lower their costs of labor, people can outsource certain tasks in order to give themselves the time to do the things they really wanted to do in life.

If you run your own business, which many people do these days, it may be difficult to get the balance right between work and home life. Doing too much of one thing may leave you feeling as though you are neglecting the other and this is not the recipe for a happier life. Therefore, obviously the job is very important because this is the source of income and is probably something that the person has a talent for. Outsourcing household tasks can allow them to focus on their core strengths and this should enable them to get more done with their time at work. This in turn, may very well make them more money, allowing them the freedom to do more in life. It is easy to see there can be a positive cyclical effect from outsourcing tasks and household chores which should make it worth considering for many people.

If this all sounds a little too farfetched, people may find it comforting to start small and possibly swapping tasks and duties with friends to see how it goes from there. Even gaining a small amount of economies of scale can make a difference and if it is a success, it may be worthwhile thinking about doing on a larger scale or taking the professional outsourcing approach.

It is never likely that outsourcing household duties or tasks will become a bigger industry than the way that outsourcing can affect major industries but it may make a massive difference to the lives of certain people. Everyone has to seriously consider their options in these troubled times and it may be that outsourcing certain tasks will provide enough freedom to take control of their lives again.

During times of difficulty, it is perhaps only natural that people will take an interest in what is affecting them and choose to attack or criticise anything that sees their local community miss out. An obvious example of this would be in the jobs market and with the current economic situation being what it is, anything which takes jobs away from an area will have people angry or annoyed. Outsourcing has been an extremely popular tool for businesses to use to ensure they are operating as efficiently as possible but this has caused controversy with many jobs being taken away from home-grown workers and being transferred to offshore employees. Whilst the business opportunities of outsourcing are accepted by many leaders and politicians, when even President Obama is moved to comment and review legislation regarding outsourcing work, you know there is the potential for a major problem.

The move to stop the tax incentives that are currently encouraging so many US firms to outsource their work to foreign countries is something that the Obama administration is keen to bring to an end. In doing this, more work should be maintained in America which could go a long way to stimulating the economy and moving more people back into work in America. This is clearly of great benefit to the American nation and economy and is just one of the innovations by Obama that has been warmly approved of in America and could well be copied by a number of other countries.

The vast majority of focus will always fall on the firm and nation who holds the original job but not too many people give much time to consider the fate of those who actually provide the outsourcing work. Recently, many business experts in India, a renowned home of outsourcing work, have felt moved enough to comment on the noises that have been emanating from the Western culture with regards to outsourcing. The need to pinpoint the dangers that could befall the Indian based outsourcing firms is apparent and if work from nations likes the US and the UK dries up, there could be some serious consequences ahead.

With other nations seeing the benefits that have arisen through outsourcing, India and the other established nations like China and Malaysia are now being targeted by emerging nations who are keen to take some of their outsourcing jobs away from them. Such is the way of life in the global economy and it could not have come as a surprise to see potential rivals emerging in order to take work away from the established outsourcing giants. Of course, now that there is pressure also being applied from the Western nations onto the outsourcing firms, it is starting to become a difficult time for the established nations of outsourcing.

Given the current economic climate, there is no doubt that most people will be attempting to re-evaluate their options and look to get the best deal for themselves and their workers. Nations like India are no different to anyone else in this respect but it may well be that they have to argue their case very strongly to remain an important player in the outsourcing world.

One of the major problems that arise during times of a recession is the fact that contracts that once seemed attractive can now be damaging to a firm. If the organization has secured a long-term contract, they could be looking at the fact that the current financial situation may mean their deal is hindrance and that they may need to renegotiate or look at ways of ending the contract. The only problem is that this will cause further expense or take up a considerable amount of time, two elements that a firm can ill afford to waste these days. This makes it difficult to justify any changes made in the agreement and it also has to be remembered that the other partner in the deal may not wish to alter the agreement. If the deal is bad for one company, it may well be more lucrative for the other which will lessen their desire to change anything about the way that the contract is laid out.

However, there is no doubt that firms have to examine every aspect of their company at the moment and it has been reported that as many as one in four currently outsourcing firms have plans to renegotiate the contracts. These results came from a survey that examined 200 firms in the UK that currently use outsourcing, which means that 50 firms questioned were looking for a better deal. The reason stated for the desire to change revolves around the current economic crisis and that the price of the contract is no longer attractive.

Some firms looking to end their outsourcing contract and are aiming to bring the work back in house. This will give the firms employees a boost as it will provide more work and should provide people with a greater degree of security than what they may have had. Of course, the staffs that are currently employed by the outsourcing firms will notice the opposite effect and it is only natural that they will be concerned about any changes to their workload.

It is not all bad news for outsourcing firms as there are also many firms out there who are not looking to alter or review their current outsourcing deals at all. This is because many firms accept that the cost and time involved into requesting tenders and the trying to pick the most attractive option can be very time consuming and it is better to stick with the current outsourced firm. This can also be seen to the development of long term relations, which should hopefully bring something else to the agreement and give additional benefits to all parties. When firms work together for a long period of time, they should be able to sort any problems sooner and be able to communicate far more effectively. If firms can develop this sort of relationship then the financial aspects will not matter as much as it is possible to gain in other ways. Like all industries, the world of outsourcing has to accept that the current economic situation is causing many firms to revaluate what is going on but it can be seen that there is no reason to fear change or adapting to new processes.

Outsourcing usually focuses on topics like production on call center work but many people are becoming aware of the fact that outsourcing can be used for a whole host of issues and matters. Given the fact that the financial status of the world is in a particularly bad place, it makes sense that all firms and organizations are looking for ways in that they can improve their financial status and ensure they safeguard their future. Even banks and financial institutions are aware of the possibilities that can arise from using outsourcing and given the amount of problems that they are facing, the solutions offered by outsourcing may be enough to allow companies to maintain a secure base.

One institution that is seriously considering outsourcing as a solution to their problems is the Hypo Real Estate Group, who has been blighted by bad loans. One of the major elements of the recession is that people have been unable to repay loans or cover their debts properly and this means that many banks or banking institutions find it more difficult to claim the money that they are owed. This money can always be reclaimed, with the full extent of the law behind them but sometimes it can be very time consuming and costly to pursue the money as much as it needs to be. This is why some firms are now thinking that they can earn money quickly but outsourcing these bad debts to other firms who will use their staff and time to pursue the customers.

In doing this, Hypo Real Estate Group will be able to receive a quick fix cash boost and they will also be able to reduce the number of staff they need to employ. It is said that the firm will be able to reduce their employee levels by around 1,000 people in two moves, which in these tough economic times will be able to provide a benefit to any firm and this is what Hypo Real Estate Group are hoping for.

As more and more people find themselves falling into deeper debt, the industry where these loans and debts are uncovered are going to become extremely lucrative but obviously there is a human aspect where firms have to be aware of how they would viewed. Chasing after bad debt during these tough economic times is not going to give a firm a positive rating with the general public and therefore, many may be looking to get away from this sort of business. This means that being able to outsource these measures can be of great benefit to any firm, even when avoiding the financial aspect of the task at hand.

Therefore, with so much to gain for any banking firm or institution for issues like this, it doesn’t take much consideration for any organisation to think about outsourcing and there is always likely to be a supplier willing to take on this work because the guarantees of future income. It may not be a popular job but with money hard to come by for so many people, it is a task that is going to be in demand for many people.

When people think of Spain, they will likely consider the beautiful beaches, the stunning architecture and the triumphant football teams and tennis stars. Yes, Spain is one of the most popular and vibrant countries in all of Europe but it may have a lot more to it than you originally thought. There are a number of business opportunities and economies of scale effect which means that Spain is perfectly positioned to offer tremendous outsourcing benefits to other nations from all over the world.

There is a great IT infrastructure within Spain, with fully educated staff working at the cutting edge of technology. The close links and easy transportation / delivery methods to other European nations also helps to brighten the appeal of Spain and the links to South America should never be under-estimated. The historical and cultural links between Spain and Latin America are extremely well documented which would bring benefits to firms hoping to enter the Latin American market or even a Latin American firm hoping to bring work over to Europe. The benefit can go either way, which places Spain at the center of a link which could revolutionize the way that many organizations or companies do business.

With the current financial situation being what it is, it is only natural that people are going to look for ways to reduce costs and have their work produced to the same standard but for a lower price. Any company that does not seriously re-evaluate their working practices during the recession is taking a risk and leaving themselves liable to losses so now is an ideal time to re-evaluate the cost of employment. With regards to the IT sector, the employment costs of Spanish workers are roughly half of their UK equivalents, which immediately make the prospect of outsourcing to Spain attractive. The cost of labor in Spain is not quite a slow as the labor costs in India but it is not far off and there are many other benefits obtained from working in Spain which will greatly offset any additional cost incurred by setting up camp in Spain. The overall benefits, as opposed to what is obtained from the bottom line is where Spain manages to stand out from its rivals as it is able to compete on price and quality. This mixture is allowing firms to have confidence in the work that they are outsourcing and will leave them free to focus on other matters and issues.

There are Spanish firms doing well all over the world with the Santander Group and Zara being two organizations that have become household names across the planet so there are a lot of success stories emanating from Spain to allow firms to have more confidence before entering into a deal with them. Any outsourcing decision must be carefully considered before it is undertaken but with so many Spanish firms showing their strength and might around the world, working with Spanish firms on an outsourcing project need not be as daunting as some people would make it out to be.

One of the biggest success stories in business in recent years, and let’s face it, there haven’t been too many, has been outsourcing and the developments brought from it. You only need to look at the number of countries surging ahead with plans and hoping to topple India, China and Malaysia from near the top of the outsourcing list. This is because the countries who take on board outsourcing are well aware of the benefits that the jobs and association bring to their nation but the firm who is undertaking the outsourcing is also a recipient of great benefits. Many firms have been struggling to remain financially viable of late but by using outsourcing as a means of reducing labor costs yet retaining a high standard of product, it has been possible for firms to remain trading and build a platform to have a better future.

However, it appears that not everyone is enamored and in love with outsourcing which has caused an uproar in those within the outsourcing community. Okay, not everyone is going to love the idea, especially those who may find that they are going to lose their job because of outsourcing but when a large poll of HR staff are commenting on the effectiveness of outsourcing, it is possibly time to sit up and take notice of what people are thinking.

The Chartered Institute of Personnel and Development (CIPD) have released figures after polling their members which bucks the general trend of how people are viewing outsourcing. Fewer than 50% of those asked believed that outsourcing had been a success and less than 10% of respondents stated that outsourcing had been a total success. This follows on from the calculation that 29% of all companies questioned stated they used outsourcing as part of their HR requirements. Clearly, there is still a long way to go to ensure that outsourcing is rolled out properly amongst the industry but figures like these will do very little to encourage the remaining firms to enter this market and gain the benefits that are being obtained by other firms and departments.

As with all surveys, care has to be taken about how was asking the question and why they were asking it? If many of the people currently employed in the HR industry are asked about outsourcing, they may have a fear that they will lose their own jobs to outsourcing and therefore may be keen to push a negative image of outsourcing. This would make sense when trying to reconcile the opinion that most other industries and departments have about outsourcing, the vast majority of which seems to be of a popular note.

These findings probably tell consumers more about the reliability and honesty of people answering surveys, and indeed the reason why surveys are commissioned in the first place, as opposed to being a true gauge on outsourcing in the HR industry.

One of the most surprising things about the current recession is that some people are still spending money on certain products and items. The recession may mean that people are not going out socializing as much as they used to but instead, more money is being spent on staying home entertaining. Whether this means that friends are coming over for more parties or people are considering their home entertainment systems, it is fair to say the staying in is the new going out. These has led to many people looking for the new wave of televisions and are switching to flat screen TVs, plasma TVs and ones that are HD ready. All of these technological advances are changing the way that people watch television and are stimulating some demand and movement in the economy for the industry. However, it still seems that some firms are struggling to justify all of their costs and are looking for ways to reduce their labor costs. Even a big firm like Sony, long regarded as one of the major market leaders in top of the range televisions are finding times hard at the moment and they are looking to outsourcing as a solution. A great number of companies in recent years have decided that outsourcing services or manufacturing will offer them a greater chance of remaining healthy and vibrant in the market and this has led many companies to shift their focus to offshore outsourcing.

Sony, as a firm, has always seemed keen to retain control over all of their manufacturing output, believing that the quality control that comes from producing their own products to be worth the cost involved with undertaking this work. Times change though and the bosses at the company are now starting to realize they can have high quality work for a low cost and the firm is said to be closing two factories that produce their flat-screen television sets. Even though Sony has factories and manufacturing plants all over the world, the lure of offshore outsourcing is proving to be extremely strong and the opportunity to make a huge saving with regards to production costs cannot be under-estimated.

Industry insiders believe that the Taiwan based company Wistron is likely to be the company that Sony turn to for the production of their television sets and this will be of great benefit to their firms employees and the local economy. A recommendation from a multi-national firm like Sony can make all the difference to an outsource supplier and Wistron will likely feel the benefit in years to come if they are able to do a good job for Sony.

For all that outsourcing this level of manufacturing will be of great help to Sony during these troubled times, it is unlikely to provide a solution to all of the problems that the company is facing. The firm posted over 1 billion in losses in US dollars last year and whilst this year’s figures are likely to be nowhere near as bad as this, they are still expected to be over $500 million, more than small change, even for a company like Sony.

When you go to see a film, it may be the Hollywood actors and actresses that grab the attention and bring in the punters but invariably, it is the special effects that are going to leave the biggest impression in people’s minds. The big summer blockbusters are crammed full with CGI action and mind blowing scenes that are invariably the talk of the town and this is why the studios are so determined to pack their movies with as many big effects as possible. As the technology involved in bringing these scenes to the big screen becomes ever more advanced, the costs are rising. The film industry is one of the biggest grossing industries in the world but like all firms and industries at the moment, the recession is having a major impact on how these firms operate. Being able to bring in great special effects can help make a film a great success but they can be very costly so it is inevitable that firms are looking for ways to reduce the costs involved and like many industries, outsourcing is providing an answer.

The worldwide home of outsourcing is India and the reason for this is because they have proven able to produce top quality work at a greatly reduced cost compared to their US or Western equivalent and the special effects industry is no different. It is said that the reason why Indian special effects companies are able to receive more work from American studios and firms is because their costs are said to be around 40% lower than the same work in America. This is almost half the costs involved for special effects which mean that it is a decision that should come very natural to the film makers in Hollywood. Lowering the costs involved in producing the special effects should ensure that a greater degree of profit can be made.

The general public will see some form of benefit from this with some of the money being pumped back into future film productions but obviously the biggest use of the money will go to the people behind the scenes. Such is the way of the business world but if everyone can gain from this arrangement, then it’s a partnership that should be considered. Some of the biggest films in recent years, including the Lord of The Rings films have featured many scenes which were created in India, which gives a greater degree of confidence about the quality of the work being produced in India. There was a fear that because of less number of hands on US activity film producers would lose control of their movies; but it has been shown that this is not the case. Like all good outsourcing projects, strong communication between both parties is vital and a key part of success of any project. As long as the guidelines and expectations are laid out from the start and all parties know what is required of them, there is no reason that the project should automatically fail.

One of the major problems when trying to implement an outsourcing activity is dealing with the complaints of the existing staff who may find their job altered or indeed made redundant. One of the problems for many firms is that they are being held back by the notion of what jobs were and being unable to move with the times. This is exactly the case with the Fairpoint Communications workers whose main gripe about the outsourcing work being the fact that they believed they had jobs for life.

The number of job losses isn’t really relevant because it should be viewed as the total impact within the community but 40 job losses, which is the proposed number of outsourcing jobs being taken from Fairpoint Communications employees in Maine, can be enough to make people stand up for themselves. Which is fact that is known by trade union people and there seems to be a move by the trade union to make these potential job losses known, although the firm are at pains to stress that no plans for this have even been submitted yet.

This suggests that trade union workers are more than happy to peddle the myths and fears of outsourcing in order to swell their own numbers and popularity, making outsourcing an unwitting partner in the propaganda for trade unions. There is no doubt that trade unions do a lot of great work for many people and an employee should give the matter serious consideration as to whether they would benefit from joining one but there is a great need to uncover the truth behind the rumours and stories and to determine what is really driving their actions.

When trade union officials make remarks about the jobs should not be outsourced because they have been around for decades and decades and the jobs have been cradle to the grave jobs, it is obvious that there is some seriously outdated opinions in the current workforce. Admittedly, this is the sort of thinking and opinion that will keep trade unionists in power so it is not as if this approach or attitude is a surprise but considering the current economic climate, a firm would be mad to not consider doing everything they can to ensure that their business is running as smoothly and efficiently as possible. The loss of jobs is highly regrettable and there should always be other steps taken to preserve work but if that cannot be arranged, it may be the case that outsourcing is required to preserve the future of the entire firm. With this in mind, it is apparent to see why outsourcing can be of great benefit to the organization as a whole and could provide a longer term benefit to the local economy. With every business decision, there will be positive and negative aspects involved and striking the right balance is a difficult task for all concerned. There is every justification for people to be annoyed with outsourcing if it actually does cost them their jobs but there also needs to be an acceptance that certain people will benefit by making outsourcing out to be a big, bad monster that wrecks communities.

You don’t have to be an avid news junkie to understand that the world economy is in a pretty bad place at the moment and that many people and businesses have been struggling to make ends meet. This has led to firms going under, people losing their jobs, their homes and their self-esteem and generally placed a lot of pressure on people and their relationships. However, in life, wherever there is a bad reaction, there can usually be an equal yet opposite reaction which sees people benefiting whilst others are suffering. This is a very natural reaction and nothing out of the ordinary but up until recently, it has been considered that outsourcing has been doing very well out of the current economic downturn and recession.

This has been due to the fact that firms have been so desperate to cut costs and reduce their overheads that they have looked to reduce the costs of labor and outsourcing has given them a fantastic opportunity to do so. The chance to save money whilst having the same, if not higher, quality of product or service is a no-brainer in these troubled times and this has led many people to believe that outsourcing was one of the untouchable industries, striving onwards in a time when destitution came knocking at the front door of many companies and organizations.

However, the further reductions in the budgets and spending capabilities of many firms in America is now starting to creep towards India and the outsourcing firms based there are starting to feel the pinch. This is made even harsher by the fact that so many new countries and offshore firms are looking to take some of the outsourcing market as well and they are able to undercut the prices offered by Indian firms. All in all, India’s outsourcing firms are starting to suffer in the way that they hit a number of areas in recent years and if the market continues to struggle, there could be some difficult times ahead for the India based outsourcing firms, especially those specializing in IT.

The IT industry is a strange one as it relies very much on continual development and progression and failure to keep up can be disastrous for the long term future of a firm or business. However, as budgets are slashed, many firms are considering it to be too much of a risk to place all of their IT needs in an outsourced basket. Some of the thinking behind this decision lies in the fact that all of the firm based employees would have an easily defined lack of knowledge about the current developments in IT and if the firm had to take control of their own systems in the future, they could be woefully short of the knowledge needed to perform the task successfully. This has caused further pressure on firms to limit the amount of outsourcing activities they undertake, which has had an even bigger negative impact on the outsourcing firms based in India. India is still the home of outsourcing but if the economic downturn continues and the countries snapping at their heels keep on improving, who knows how long that will last for.