Sunday, 12 August 2007

Advantages of Offshoring

Apart from obvious advantage of saving money, there are huge benefits for entire world, some of them are listed here:

  1. The first and obvious is benefits of lower cost for the business offshoring the work to cheaper locations like India, China, etc.
  2. Improve the quality of their work by taking advantage of excellent and quality oriented workforce of India.
  3. Saving huge time and tension to the Client top management which would have been spent in interviewing a lot of prospect to fill a few posts. To adress urgent requirement for people, they have to spend time which can be cut when they engage offshorer who can supply people fast, saving opportunity cost as well.
  4. Assemble teams and projects much faster than possible as offshorers already have people of all skills on bench ready for deployment.
  5. Huge profits for banks like HSBC, Barclays as they save more by cutting cost.
    They save lot in cost-cut. The US healthcare costs have dropped by 30% since all the data is processed in low-cost locations. And these profits definitely benefits local by way of either dividend distribution or by creating more job, or by investing in new R & D, etc.
  6. More opportunities are generated for UK / US business like more sales for airlines, Microsoft, IBM in hardware and software sales. As countries like countries grow demand for UK/US’s high end product grows so UK/US. American products and services are highly regarded and popular among this new breed of Indians creating growth opportunities for US businesses in many spheres. Similarly more businesses for food chains, sport accessories chains as more spendable money in hands of Indians
  7. More stability in Indian region as job keeps people busy making world a peaceful place.
  8. Ripple effect to Indian economy improving entire economy.
  9. More lean and mean UK/US corporations so more values for shareholders
  10. More profits so more new innovations and more high end job creation in US
  11. Better services to customers, as without offshoring all services would not have been possible due to higher cost.
  12. Lower cost so cheaper services and products to consumers
  13. Lower jobs go to India so people in developed nations have to go for higher education to remain employable and improve overall education level in developed world.
  14. Higher education so more entrepreneurial public creating more jobs in newer areas.
  15. It’s more a tool to increase growth and boost efficiency than just pure cost saving exercise.
  16. Companies have cut down time to market by more than half and also reduced their investment in product development as it shares the same with outsourcers.
  17. It helps corporate clients meet their tech needs without worrying about h/w or s/w trends
  18. These create local jobs also, recruiting local skills which are not available in India, setting up office.
  19. Offshorers also create local jobs and employ local people.
  20. new skills sets like handling offshore team, etc. come up in local markets
  21. Vendors, having worked with several customers in same area, can provide a lot consulting advice from their experiences, share the experiences of other organizations and their use of particular solutions. This knowledge would not have been possible to corporations otherwise. It's like learning by others' mistakes so save time, money and stress.
  22. Can be used by all areas of business, from software development to claims processing, HR administration, and accounting and finance, reasearch, legal, any service you can think of.
  23. Thirty years ago, electronics companies such as Motorola, Texas Instruments, and Intel sent manufacturing overseas to cut operating costs and speed product development by taking advantage of wage gaps and time zone differences. Without global resources, these companies couldn't cost-effectively develop the hundreds of new product designs needed each year.
  24. Studies have shown that with globalization, gross domestic product figures have gone up for all participants in the global economy, both in emerging and developed regions.
  25. automation brought a host of new conveniences and capabilities to American companies,
    the species that survives is the one that is "most adaptable to change."
  26. by having design teams working in multiple time-zones companies can reduce time to market, so save cost and also remain first to market winning more market share.
  27. Indian software industry association, Nasscom, figures that each new worker in the info tech sector creates seven indirect positions, from janitors to security guards. it's a virtuous economic development model.
  28. the labor savings from global sourcing can still be substantial. But it's peanuts compared to the enormous gains in efficiency, productivity, quality, and revenues that can be achieved by fully leveraging offshore talent.
  29. If we want to recruit a great engineer in Silicon Valley, our lead time is three months and in India it is just 2-3 days.
  30. Clean, well-paying service jobs boost demand for educated workers, an impetus to improving schools and training. And the high-level skills learned "spill out to the economy as a whole,"
  31. Other industry advantage: Over 60% of the commercial real estate in India in the last 3 years was leased to the IT and BPO industry players. The automobile, hotel, airline, catering, computer, telecom and construction material industries and many professional services industries like legal, recruiting and accounting get a major boost from the IT and BPO growth.
  32. the most optimal use of global resources and challenges the benefits of trade based on comparative advantage.
  33. faster service X-rays that are taken at night in a U.S. hospital when the radiologists are not on duty are e-mailed to foreign doctors in another time zone who analyze the x-rays and either e-mail the diagnosis to their American counterparts or call them back to discuss the results.
  34. Products are broken down so that their respective parts are simultaneously manufactured in the U.S. and abroad -- all with close collaboration among the manufacturers. The finished product, when all of its parts are ready, is then assembled at the most convenient and economical location, faster time to market.
  35. Due to globalisation, inflation remain arrested that creates a stabilizing factor in society.
  36. Things become cheaper so that more people can afford things improving overall lifestyle and prosperity and bringing more homogeneity in society.


  1. Thanks for illuminating about the issues that the legal process outsourcing companies deals.
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  2. This is good thankyou

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