The Development of Offshore Outsourcing
The society today has gone a long way since the invention of electronics and computers. People have found more and more ways to utilize this advancement. Through the years, computers have been slowly developing and have been integrated with other technology and made it possible for the birth of video games, cell phones, high-end televisions and smart phones. But, one of the greatest feats was its contribution to the business world.
Business owners have learned to use technology for the ease of their transactions. Much more so, it has been a great help in their promotion and advertisement. This is where outsourcing comes in. Outsourcing has been a buzz lately, so is “offshore outsourcing”. But, what does these terms really mean?
First, let us be enlightened of what outsourcing really means. The mere definition of outsourcing is the practice of contracting one company by another company to perform job functions outside the corporation instead of having an in-house individual do it. This might sound a little confusing at first. You might even think, “Why would I even do that?” The truth is, outsourcing helps the company to be more time-efficient by eliminating tasks for their employers and just concentrate on things they should have focus on. For example, you do social bookmarking for your website when it should be spent doing more important tasks. This is why outsourcing is a big help for companies.
On the side, offshore outsourcing may be, in cases, similar and different. Since both have the term “outsourcing”, it has the same function and purpose as outsourcing. Technically, you can call it a type of outsourcing.
Offshore outsourcing literally means outsourcing your business to someone that is off your shore, or in simpler terms, someone that is not in the same country as yours. The creation of this kind of outsourcing can be attributed to the fact that more and more products are marketed abroad the place where it originated.
But it does not follow that any business can be outsourced offshore or what we term as “offshore-able”. There are things to consider. There are general criteria and they are as follows:
(a) There is a major difference of wages and cost between the home country and the target outsourcer country;
(b) The job or task can be done in “telework”;
(c) The work has high information content;
(d) The work can be transmitted over the internet;
(e) The work is easy to set up; and
(f) The work is repeatable.
The driving factor for the creation of offshore outsourcing is the need to cut the cost while it’s enabling or maintaining factor is the global development of electronic internet network which allows digital data to be accessed and delivered to almost any part of the world.
One of the main factors that influenced the beginning of this kind of outsourcing is the combined pressure of lowering the labour costs, save operational costs and improve productivity. The logic is: if they want to keep up with their competitors by lowering the price of their product, companies should start reducing their labour costs and save money.