Should you outsource? Are you not causing a loss of employment in order to save costs? These are only a couple of questions that have been posed by critics of outsourcing. Ever since outsourcing caught on in Western countries, there has been some opposition to it. A loss of jobs in the host country has been touted as the main negative effect of outsourcing.
While the argument is valid, companies have outsourced many of their functions to stay competitive in a fast paced market. Organizations hire specialized companies, not necessarily outside of their country, to outsource many tasks that could be better handled by a vendor. The biggest benefit of outsourcing is that not only does it save costs for a company, but also gives it access to resources and skill-sets that wouldn't have been possible locally.
It is now widely accepted that outsourcing is not just a cheap labor tactic, but also a strategic business decision. However, ethics and outsourcing continue to be burning issues for many businesses who want to make the move to outsourcing.
Quality, control and cultural differences are a few concerns that keep coming up when one talks about the risks of outsourcing. For more than a decade, Outsource2india has worked with customers across the globe. One of our primary tasks has been to strengthen relationships by letting our work speak for itself. Through these relationships we have been able to demonstrate that instead of outsourcing harming jobs, it has in fact given more freedom to companies to operate competitively and be successful.
We discuss below some key issues when it comes to handling the ethical dilemma in offshore outsourcing.
Companies that outsource have often had to face resistance and complaints about a drop in quality when moving jobs. In the early days, outsourcing was seen as a cost-saving measure, with an expectation of low-quality output. Things have changed drastically since then. Outsourcing relationships now define quality as one the main deliverables, among others.
One of the pitfalls of failed outsourcing relationships is not being able to identify the right partner for a company's outsourcing needs. There are a few so-called outsourcing providers who charge rock-bottom prices that have attracted companies. While a few of these sweatshops might succeed in the short term, companies dealing with them have had bitter experiences with low quality output, mismanagement of resources and security issues, etc.
Outsource2india has built a reputation for educating customers about both the advantages and disadvantages of outsourcing. Our ability to work with a business's goals rather than focus on specific projects has helped us forge strong relationships with customers across the globe.
Below-par work environments and shoddy HR policies are two other reasons that critics often quote to describe how 'body shops' have sprung all across India to meet outsourcing demands from the West.
While this argument might have held water in the past, the reality is much more different now. Barring a few, outsourcing providers in India employ world-class work environs and systematic HR processes. The attrition rate in the Indian IT/ ITES industry is comparable to or even better than that of other nations.
Security and privacy of data are valid concerns, but are often misused by those who warn against outsourcing. Data security measures need to be put in place, whether a company is planning to outsource or not.
Confidentiality agreements, firewalls, SLAs and solid infrastructure are some parameters one needs to look at when entering into an outsourcing arrangement. Past customer references and experiences can also give you insight into how risk-proof an outsourcing vendor might be.
Cultural differences between the West and Asian countries are huge, and are often a cause for worry in an outsourcing relationship. But these can be bridged by understanding the cultural sensitivities and how they can affect the outsourcing relationship. This needs to be done early in the relationship to avert any issues that can crop up later. That said, a lot of Indian companies are now sensitized and trained in Western cultures, which help reduce any culture shock.