Niyamath Parveez

Looking to outsource is an option that many firms are looking to do but where to start? For a large firm, there may be a number of departments within the company that can be outsourced and this means that the decision about outsourcing needs to focus first internally. Not every department or workload is a great fit for outsourcing and some areas within the business may be core strength. If a company has core strength or something which stands them apart from their competitors, it would be very silly to lose that easily. This is why outsourcing decisions need to be based around value as well as cost.

After the decision is made about which department to outsource, the decision then comes about who to work with? The internet is likely to provide some clues but when choosing a supplier, is it likely a firm would pick any supplier from the internet? No, there is likely to be a great level of research and in-depth study carried out to ensure that the best solution is found. This is the same sort of thinking that should be used when deciding an outsourcing partner. Making sure that outsourcing is seen as an important factor will go a long way in finding the best fit.

It is fair to say that India has developed a great reputation in recent years for providing outsourcing work and many companies will instinctively go there. This may seem like a great idea but again, there needs to be a level of thought about this to ensure the best choice is made. Just because an outsourcing firm is based in India does not mean that they will be any good, so the actual firm itself has to be examined. It may well be that firms outside of India will be able to undercut the price.

This is because so many nations have seen the positive effect that outsourcing has had on the Indian economy and they naturally want in on the action. This has led to these companies and countries using the same tactics as India used to undercut Western nations. However, now it is India that is being undercut and the cycle of market forces spins again. This was inevitable and the smart Indian firms will have seen this coming and attempted to provide some form of insurance against it. The established firms will be able to offer experience and wisdom, which will hopefully provide value for money as opposed to just the lowest price.

All of these factors need to be weighed up before any semblance of outsourcing decision can be made. When a firm just wants to reduce their labor costs, it may seem like a lot of hard work but there is no point in taking the easy option when so much is at stake. Companies would not put their business at risk with other deals or supplying contracts, so outsourcing should not be an exception to this rule. If you want the best outsourcing solution, you need to do some research first.

India is the place to be for outsourcing but this hasn’t just come about through luck, there are a lot of good reasons why India is rightly proclaimed the outsourcing capital of the world. Of course, as many smaller nations look to take advantage of the benefits that has propelled India to this position, there is a greater degree of analysis about what India has to offer and can it be replicated in other places throughout the world. There is no doubt that if there is some sort of secret formula than can be used, there will be a queue of developing nations eager to copy the Indian formula but it may not be as straightforward as that.

One of the key reasons why India has surged in front for outsourcing is the fact that a great number of their population are very keen to learn and find it easy to take on new instructions and challenges. It is wrong to say that this applies to every individual within India but there is an acceptance as national traits and characteristics go, the Indian people have a tendency to develop their skills and are happy to study new skills. This makes them very attractive to foreign firms looking for an emerging workforce to replace their own model.

Given that there is a learning curve in India, it follows on that the wages used to pay the staff in India will be of a lower nature. This makes sense as in any country in the world, a training wage is always liable to be of a lower level than a fully trained up person would obtain. This goes hand in hand with the fact that the standard of living and the average wage in India is of a smaller level than it is in most countries, which means that companies can greatly improve their labor costs by moving their work to India.

With the current economic climate being what it is, every company has to do its best to ensure that they are behaving with financial sense and are able to justify their decisions. If any firm can receive a product from one supplier at a far lower cost than what they would from another, and with no other difference in the product, it is sensible for them to go with the cheaper supplier. The exact same principle applies to outsourcing and this is why many firms are choosing to go with an Indian based outsourcing supplier.

The quality of work and service that is created and produced in India is very comparable to what is on offer from so many other nations and the fact that the labor costs are much lower is enough to make India stand out. There are many reasons why India holds the position it does but for many businesses, the bottom line is King and this is an area where India is extremely hard to beat. If you need to lower your expenditure on labor, heading to India may give you a great start.