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| Marketplace - OffShore Outsourcing |
| Overview |
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By every estimate the offshore outsourcing trend is large.
- According to Deloitte Consulting, 2 million jobs will move from North America and Europe to cheaper locations in the financial services business alone. The exodus of service jobs across all industries could be as high as 4 million. The consulting firm forecasts that three-quarters of leading financial institutions and investment banks will allocate tasks to developing countries in the next five years and that India will be at the top of the list. Global financial institutions will invest $356 billion in India for outsourcing projects
- By 2015, Forrester Research estimates that as many as 3.3 million U.S. jobs and $136 billion in wages could be moved to such countries as India, China, and Russia
- India expects to create 2 million jobs in the next decade in offshore outsourcing
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| Benefits |
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The most obvious benefit of offshoring is the low cost. But other benefits such as an educated, English-speaking, high quality large pool of talented labour; plus complimentary time zones all make offshoring attractive.
India is home to the largest educated English-speaking population in the world. Other than language, the geographical location of India lends itself well to a 24x7 operation. The time zone difference between North America and India is about 12 hours. This means that a job submitted at 6 p.m. Pacific Standard Time (PST) reaches India at 6 a.m. and is completed by 6 a.m. PST the following morning. Another positive feature of countries like India and China are the country's highly motivated workforce.
As offshoring grows, the cost of labor in more established areas like India is also rising. Many of the same phenomena that North America experienced in the early 2000s during the dot-com explosion are happening now in India. The competition for talent is heating up, and salaries are beginning to skyrocket. Employees are constantly looking to increase their salaries and are switching jobs quickly. Increasing salaries, competition for talent, turnover rate - all of these factors will affect the benefits of offshoring.
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| Concerns |
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Outsourcing to offshore locations exposes companies to greater risks of many different types, such as country instability, regional turmoil, unstable economies, poor infrastructure, lack of exposure to Western business culture, and data insecurity. In addition, whenever a company sends its customer data to another company, there is a risk of that data being misused.
The primary issues concerning companies when they relocate services offshore are: their expertise in managing remote locations; the caliber and skill sets of the labor force; the cost of labor; language skills; telecom bandwidth, cost, reliability; infrastructure; political stability; enforceability of intellectual property rights and the general maturity of the business environment.
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| Procase's Hybrid Approach |
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Procase has opened an office in Beijing, China to support the continued growth in the outsourced offshore IT business. We have quickly proven ourselves as a high quality hybrid offshore solution provider; a supplier that can blend both onshore and offshore resources with project management and quality control processes to deliver lower priced project success.
Within this hybrid approach, Procase maintains all key client facing, project management and key technical positions onshore. In addition, Procase always has a 'trusted' employee on-site at our offshore location to ensure the offshore team adheres and delivers to Procase and best practice standards.
Procase's proven track record of managing offshore projects and client relationships, favorable blended project approach and costing, and high-quality talent is a compelling case for those mid sized firms that want to explore offshoring to reduce costs but don't have the expertise and internal resources to manage risk.
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| For more information, please email Kevin Grennan (kgrennan@procaseconsulting.com) or call him directly at 647-880-5063. |
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