Article by Steven Andrews

The changes in the web world, the removal of boundaries of time and distance, changing strategies of growth in companies are things which are of a recent origin. These changes have brought about a sea change in the way people look at getting their goods and services produced in a country. People no longer believe that all the goods and services should be produced only in the country in which the owners live and thrive. The concept of offshore outsourcing is spreading like wild fire and more and more companies are jumping into this bandwagon, citing reasons of cost reduction, increased productivity and increased profitability as the main reasons. However, the concept of offshore outsourcing needs to be looked at dispassionately and all points of view need to be taken into account, both for and against. While there is no denying the fact that offshore sourcing is unavoidable, while outsourcing an activity an entrepreneur should also look at it from the moral and ethical angle. Any entrepreneur who wishes to outsource a part of his production activity should look at it from a total angle which should also take into account the human sufferings involved in such activity. Unless this is done, the whole objective of offshore outsourcing would be driven by profit motive alone.

So what is offshore outsourcing? It is nothing but a relocation of some business modules and functions to some offshore countries. What function to outsource and what to retain internally depends on the products and services and the availability of cheaper labor pertaining to those functions that are being outsourced. Today there are many countries which have become favorite destinations for outsourcing and India is the preferred location of IT offshore sourcing and when it comes to other low skill outsourcing China is becoming a favorite destination. The advantages and benefits associated with offshore outsourcing are many and it enables better utilization of global resources particular human resource, and it also helps a lot in reducing costs. Quality wise too it has been found that offshore outsourcing does not make much of a difference. Hence, whether we like it or not we have to learn to accept it as a reality. But the government should have a close watch on offshore outsourcing and should take a balanced approach which does not harm the local economy beyond a point. At the same time they should not come out with draconian laws on offshore outsourcing which might be a dampener to entrepreneurial skills.