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