Niyamath Parveez

Although there is absolutely nothing new about outsourcing, the way that many companies are using are becoming more innovative. A lot of this has been driven by the need for firms to squeeze every cost to a minimum in order to stay competitive and alive in a harsh industry. The economic downturn has had a massive effect on the way that businesses are run and even when the recession is over and the economic situation improves, it is likely there will repercussions throughout a number of industries. The amount of firms using outsourcing as a solution to their problems may alter but there is still going to be a huge demand for outsourcing services and production matters.

One country that has really benefited from outsourcing is India. It is fair to say that any country that is economically underperforming is looking at India with jealous eyes, wondering how best they can replicate the economic success that has taken place in that country on recent years? Although no one thing is responsible for India being able to improve their situation in a tough economic climate, outsourcing will have played a massive part. This is agreed upon by a whole host of experts and analysts, so this is the route that many other nations wish to imitate.

Part of India’s initial success came from the fact that they were able to undercut on price so many other nations. Not every firm or business is obsessed with cost and price but a great number of them are. To find that they could massively improve their bottom line, just by shipping their workload to India was a tremendous option for companies, which helped to spark the rise in offshore outsourcing. It then became a very cyclical thing. As more people shipped their work offshore, the public interest and awareness became greater. As India was receiving more work, they were able to slash their costs and prices further. This became even more advantageous to firms of other countries, which increased the demand to send work to India. It can be seen how this cycle would keep going.

Of course, it is not possible for it continually rise, there are always other factors that will prevent this from happening and the fact that other nations can provide this work for cheaper has helped to stall the Indian outsourcing phenomenon. The major firms in India are still operating and making a huge success as well as large profits but the less successful ones are falling by the wayside. This makes perfect sense with regards to market forces and a similar situation would happen in any market which is free.

This means that outsourcing and the effects of outsourcing would occur naturally but obviously there are spikes in the behavior which makes it more likely for certain issues or incidents to occur. Outsourcing has been one of the business stories of the past decade and although it may not be as interesting or innovative in 2010, it is not going to go away.