Effective Outsourcing: Beneficial to Internet Marketing & Country's Economic Growth

Outsourcing is one great opportunity for online marketers, it could also be any other business entities, to expand and put-across their messages to reach their desired or prospective consumers/customers. This kind of strategy is advantageous to those online marketers but most especially to companies who is offering this kind of system. For everyone's knowledge, outsourcing is getting resources or human resources outside the company or probably outside the country where the company is based.

So think now, why should a company or a business entity choose or consider to have this kind -outsourcing- of tactic? The answer is quite obvious, they choose to outsource or to offshore and work with these outsourcing firms for the fact that it is cost efficient, in layman's term: CHEAP. A company who desires to expand and develop their products and services opt to seek cheap raw materials for the product that they are rendering, cost efficient human resource for the services they are rendering. Let us take for example the case of a web publishing entity or a internet marketing business, when you are to find a human resource to help you in creating and managing your website, writing relevant articles for your website, who and what will you choose? The ones who are far from you but offers cheap? Or the one that is near you but costs expensive? Think. Now we come up with an idea that YES, it is more efficient to outsource a writer in the Philippines or other Asian writers in a lesser cost than hiring a writer based on California or more other states. Plus the undeniable fact of course that Filipinos and other Asian writers are proficient in the English language compared to others. Filipinos and other Asian writers writes in such a way that is creative and worth the cost.

Moreover, one of the best impact of this business strategy is the giving of more job opportunities to countries, like the Philippines, who had a low employment rate. Through this, people from around the world who have the right talent for the job that the company is seeking get the chance of having a job for themselves. Thus, this creates an impact also in the economic aspect of the country. Also for manufacturing companies, they prefer to make a branch company in the place where they are getting their materials and because of that they have to build buildings and hire workers from that place. That will surely increase the employment rate of that particular country where the said company choose to outsource. So this is a phenomenon which is highly commendable, you benefit from what you have invested and you as well provide a living for those who needs job.

So for those companies who are contemplating to try outsourcing as a business strategy, study the advantages and disadvantages before embarking into it. Put in mind that you can save or gain more, a lot of money, when you choose and opt to employ outsourcing, but of course with the consideration of its quality service that is acceptable and commendable. And not only that, considering such is also considering the thought that you'll somehow contribute something in the corporate social marketing and you'll be in line with those big companies providing more job opportunities to places where there are scarcity of work in their citizens.

Log on to:

Agents of Value

Outsourcing: Its Importance and Economic Relevance!

As far as we are concerned and as far our observation could reach, it is a fact that outsourcing nowadays has been developing extensively since the past decade. Outsourcing first appeared in the IT industry in the 1980s. This was the time when companies recognized the benefits of having IT service partners in order to develop complex systems, and enhance the way that a business process or service is managed (Schumacher, 2005). It developed a new genre of business approach, and in todays world it have become an entity, important at that, enhancing every business system.

But how important outsourcing is in todays world? How important is it in this contemporary milieu? As we can see, outsourcing has grown because of economic and competitive pressures that have made it a requirement for organizations of all sizes to equip their products and services with highly competitive quality. It have been known that outsourcing is one of the effective tools in boosting sales. Aside from the fact that it leverages alternatives that could deeply reduce cost it also renders an efficient operating manner.

So what are the benefits of such? The main driver for outsourcing is cost reduction. Labor cost savings overseas are just too great to be ignored. In knowledge-intensive industries such as Analytics and Data Mining Services, Research and Development, and Intellectual Property Research, companies can save significantly – as much as 40-50% – by offshoring work to low-wage countries. Destinations such as India, China and Russia are ideal for these services as they provide a large pool of engineers and even PhDs at a substantially lower cost. According to Boston Consulting Group, a typical annual salary for an Indian IT engineer is USD 5,000, and for a graduate with a masters degree in Business is USD 7,500 – about one tenth of their American equivalents (London, 2006).

The cost differential between a PhD in the Sciences and Engineering in the US and in India (or in Russia) can range between USD 60,000 and USD 80,000, respectively. Besides India and Russia, countries such as the Philippines, Chile and Mexico are setting themselves up to provide high-end services at low-end prices as a way to boost employment and help their economies. Hence the increasing competition will drive prices even lower than the existing level (Kakumanu and Partanova, 2006).

Another early driver of outsourcing is the shortage of skilled labour. Developed economies such as the US, the UK, and Western European countries are already facing a shortage of highly trained and specialized professionals in some knowledge-intensive, high-skill sectors, such as R&D in very large scale integration, engineering design, IT, and financial risk management. One way to mitigate these skills shortage is to source talent from low-wage developing countries. India alone produces 441, 000 technical graduates, nearly 2.3 million other graduates and more than 300, 000 postgradutes every year (London, 2006).

According to a NASSCOM-McKinsey study this is about 30% of the available supply of skilled manpower in low-cost countries (Balaji, 2005). Having one or more offshore centers can also provide flexibility in terms of human resource and time management. Outsourcing allows companies to add or reduce personnel far easier than a company can do in house, hence avoiding an expensive layoff process. By utilizing the time difference between different parts of the globe, development can take place constantly. The ability to send massive data amounts anywhere via the internet allows continual collaboration on a large scale (Kakumanu and Partanova, 2006).

As we could see, outsourcing does not only upholds quality service but economic aides as well. It is one of the economic paradigm a country could benefit from.

Log on to:

Agents of Value