| Studies reveal organisations off-shore / | | | | As local IT professionals and security |
| outsource work mainly to take advantage of | | | | specialists demand salaries in excess of |
| high-quality work for less money. But, cost | | | | $60,000/-, the downturn in USA / European |
| reduction is not the only factor that drives | | | | economies, many organisations are looking at |
| them to off-shore / outsource. Other benefits | | | | off-shoring / outsourcing a part or all of |
| derived from the trend includes an improved | | | | their IT functions to a capable service |
| focus on company core competencies, freeing | | | | provider in India, or elsewhere. With low |
| of internal resources and revenues for other | | | | investments in staff and upfront contracts, |
| purposes, obtaining resources that are not | | | | they are happy with a process that provides |
| available internally, while gaining access to | | | | quality work at reduced costs, while |
| world class capabilities and technology. As | | | | increasing company profits. Becoming popular |
| for the latter, many companies have begun to | | | | due to immediately available financial |
| look at developing software that will allow a | | | | benefits, other benefits from off-shoring / |
| linking of system implementation and business | | | | outsourcing include: |
| process outsourcing. | | | | |
| | | | 1. Annual contracts. |
| The recent success of off-shoring / | | | | |
| outsourcing to India due to cheap labour | | | | 2. Managed / monitored services that lower |
| rates, qualified skilled labour, availability | | | | employee headcount and salary costs. |
| and quality training of educated staff means | | | | |
| that more and more companies are realising | | | | 3. Cost reduction in on-going training and |
| the immense potential and benefits to be | | | | tools provided to company IT staff. |
| reaped from off-shoring / outsourcing to | | | | |
| service providers in India, especially in the | | | | 4. Reduction in recruitment costs. |
| IT sector. | | | | |
| | | | 5. Reduction in administration costs i.e. |
| Of course, there are risks involved in | | | | holidays, sick / temporary cover costs. |
| off-shoring / outsourcing, but they can be | | | | |
| countered and mitigated through diligence and | | | | 6. Reductions in maintenance costs. |
| a well-drafted legal contract. A company can | | | | |
| reduce the risk of off-shoring / outsourcing | | | | 7. Reduction in upgrades costs. |
| to a service provider by assessing the | | | | |
| following: | | | | 8. Reduction in insurance costs, and more. |
| | | | |
| 1. Potential of the service provider. | | | | Off-shoring / outsourcing on project basis |
| | | | saves a company money, money that can be |
| Location. | | | | re-deployed elsewhere for improved efficiency |
| | | | or simple enjoyment of increased company |
| 2. Political, economic and social stability | | | | profits. Off-shoring / outsourcing help |
| of the location of services. | | | | initiate a change as fixed costs turn into |
| | | | variable costs, and release capital and |
| 3. Infrastructure of the country. | | | | investment that can be utilised elsewhere, |
| | | | where it is needed most. As capital costs |
| 4. Legal system i.e. intellectual property | | | | come under control, an organisation becomes a |
| and data protection, contract enforcement, | | | | more attractive investment possibility as |
| etc. | | | | capital is utilised in additional revenue |
| | | | generating pursuits. |
| 5. Technical aptitude, language skills, etc. | | | | |
| of work force. | | | | Further, by off-shoring / outsourcing, an |
| | | | organisation buys talented supplementary |
| With a rapidly changing business environment | | | | skills, lowers its exposure to risk, and |
| and a shortening of international boundaries, | | | | obtains peace of mind. As profits rise and |
| information / data sharing, e-mail, internet | | | | costs reduce, investors, shareholders, and |
| and other technologies have expedited many | | | | customers gain confidence in the |
| business processes, while providing access to | | | | organisation, thereby giving it a competitive |
| a world market of potential customers. This | | | | edge. |
| has led to information security and other | | | | |
| functions to snare a great percentage of the | | | | As off-shore / outsourcing service providers |
| company's annual IT budget, in large part due | | | | consolidate positioning themselves to offer a |
| to the downside of e-revolution i.e. website | | | | wide range of services. All in all, the |
| defacement, hackers, viruses, worms, bugs, | | | | off-shoring / outsourcing is expected to rise |
| Trojan horse. | | | | as the industry matures and benefits far |
| | | | outweigh the risks. |