What is meant by Global outsourcing? What is difference between global outsourcing and simple outsourcing?
Sourcing is the act through which work is contracted or delegated to an external or internal entity that can be physically located anywhere. It encompasses various in sourcing or outsourcing arrangements such as offshore outsourcing, captive off shoring, near off shoring and on shoring.
Outsourcing is defined as contracting with the third party provider for the management and completion for the certain amount of work for certain length of time, cost and level of service.
Global outsourcing is a ...view middle of the document...
Business processes need to be flexible and adaptable to enable people to respond faster to changing business needs. Services outsourcing must be aligned to business goals, rather than be seen as just a tool for enhancing operational efficiencies.
Global outsourcing takes a long-term holistic view of the client enterprise and aligns its business goals to the outsourced service offerings, in contrast to tactical short-term contracts that take a piecemeal project-by-project or simple "out-tasking" approach to outsourcing.
Global outsourcing mitigates risks for the customer as it is not country-specific or geography-dependent and allows more freedom and flexibility in decision-making and operations during the outsourcing process. It allows businesses to learn, adapt, grow and evolve while ensuring predictability in quality and delivery in their business processes.
Difference between global outsourcing and simple outsourcing
Simple outsourcing is closely associated with reducing operation costs through labor arbitrage. In order to make resource savings, enterprises contract out labor intensive but well defined IT process to companies located in low cost countries. Often members of supplier’s staff are temporarily assigned to client’s site in order to facilitate to a faster transfer of activities to be outsourced. In contrast global outsourcing is more about flexibility and efficiency. The selective application of resources, to specific projects offshore is inherent in this type of outsourcing whereas specific skills and expertise are relocated taking into account labor costs , degrees of risk which certain global locations create, flexibility and the utilization of the best in class capability. Thus companies can undertake complex IT initiatives involving package configuration and integration of large scale systems projects while maintaining reasonable operation costs through the adoption if an offshore workforce. Simple offshore outsourcing has an impact on local employment while global outsourcing has an impact on employment globally.
Advantages of Global outsourcing:
Global Outsourcing, in its early days, seemed possible only by larger companies which farmed out many low-end business processes. Since then, Global outsourcing has become more of a norm than an option. Apart from the cost savings, outsourcing is seen as a strategic move that can allow businesses to gain a competitive advantage.
It certainly has opened up opportunities for organizations to utilize skill sets and expertise that they normally would not be able to access without large investments. It has also become a savior to startups and small businesses which have to work with modest capital.
At the lower end of the spectrum, outsourcing back-end jobs such as data entry/ processing, customer support, payroll processing etc. have helped organizations save a staggering amount of money. Now, there are service providers across the globe who specialize in simple back-office...