A CASE REPORT ON GROWING IT COMPANIES IN SOUTH ASIA FOR GLOBAL OUTSOURCING JOBS

Its an international business case study.

Reasons Companies Outsource to South Asia

1) Cost containment – Let’s face it, cost is what started the trend of outsourcing and it continues to be the largest driver for outsourcing. Companies can save considerable amounts of money leveraging outsourcing. As technology continues to grow to a point that all industries are technology based and all companies are in some respect technology companies. As this continues, technology is becoming a larger part of the company P&L and the primary cost that must be cut or maintained. With this being the case, the offshore model still offers very attractive models for lowering cost. Outsourcing is cheaper than nearshore or even onshore. Even with rework, the overall total cost will be less with outsourcing than any other method.

2) Access to large amounts of resources – If you are in need of building a large team quickly, the offshore model is probably your best bet. There are still many resources in the market, and many more entering it each year. While attrition may be a problem over time, initially you can build a sizeable team very quickly.

3) Acquiring new capabilities – Because there is many resources in Asia, there are also experts in every aspect of technology. Whether that technology is old, new, or just unusual. I am yet to find a technology that I could not with some research and persistence, find a company in Asia that had that expertise. As a company who may be transitioning to or implementing new scarcely found technologies, Asia will give the best opportunity to find experts with that unique skill set. That is why companies who are trying to acquire a new skillset in a technology will look to Asia for support.

4) Technical proficiency – While there are experts in every technology spread across the globe, Asia has a mass of technology proficient people at a much higher rate that most nearshore countries. So it more likely that they will have the expertise that you need in any skill. The schools in Asia are producing many new technology associates to the industry each year, and they have some of the best minds in the world graduating from their universities. Access to a large number of technical proficient people is one of the leading reasons why companies are still using Asia for their outsourcing needs.

5) Mature Processes –Asia has been in the outsourcing business for 20 to 25 years now. Many of the companies have adopted a culture of quality process engineering. Because of this, the outsourcing industry in Asia has very formal methodologies, processes, and procedures. For organizations who need a high degree of process standardization, Asia is a great option for outsourcing.

6) Research and Development – Many companies are using Asia for their research and development activities. As mentioned above, Asia is producing some of the top mathematical and engineering minds in the world. So the best and brightest of these are being used to create new products, ideas, and services. While there is danger in loosing trade secrets, the advantages of creating new ideas and products outweighs the risk.

7) Wholesale Outsourcing – If you are a company who wants to outsource an entire business or IT function, you will likely do so in Asia. It is difficult to manage to SLAs and it requires discipline and prior experience. Companies in Asia are far more experienced and have lived through the pains and lessons. Since risk is the biggest decision criteria when it comes to selecting an outsource partner, the companies in Asia have a significant advantage when it comes to experience and process. Another, advantage that Asia outsourcing firms have is that they have the size to take on large projects. Many of the Asia outsourcing companies have thousands of employees, so taking a few hundred more isn’t a large risk. This should lower the risk of the engagement to the prospective client.

8) Mature BPO Operations – Asia has been in the BPO industry for years. While call centers and IT are the areas that were first to move to Asia, since then there have been numerous industries and functions that have followed suite. Some of them include medical and financial industries and HR and operation functions. This has created a pool of resources that understand American business norms, procedures, and protocols. For business processes, like file underwriting, that do not require immediate communication, outsourcing to Asia provides a real access to talented, educated, and trained resources. Because Asia started in the BPO industry many years ago, they have a natural edge when considering BPO outsourcing.

9) Enable 24/7 development – For organization who are looking for faster speed to market, Asia offers an attractive opportunity to set up 24/7 development centers. Work is moved from onshore to offshore as the US closes shop and the India staffs begin their days, and vice versus. Many companies set up three locations to get three shifts that overlap into a truly 24/7 model. Since it is hard to retain good people on the night shift in Asia, this model works well because the best people are working their normal shifts.

10) Government Investment in Infrastructure – Since Asia has being working in the outsourcing market the longest, and it has the highest number of workers, the governments of Asia have embraced the industry and realized the importance to their economy. This has resulted in significant investments by governments into creating a sound, reliable telecommunications infrastructure that supports the industry. For companies who need to make sure that communications always work, Asia provides the lowest risk of failure.

In general, companies who may want to consider South Asia are companies who:
1) Are focused on cost reduction
2) Can segment and “black box” their work
3) Are looking for large amounts of technical resources
4) Do not need immediate feedback or comments, or
5) Are outsourcing complete functions or departments

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