Business models have become much more customer oriented and many companies experimenting with different structures in order to discover how to meet their customer's needs at the lowest cost and for the highest profit. One of the most effective ways of doing so is outsourcing. The globalization in IT sector for the last five years have brought revolution in the outsourcing business.
Recently, there has been a significant change in outsourcing trend with outsourcing companies specifically in India are providing knowledge process solutions in the field of taxation, legal & finance. The knowledge process outsourcing solutions are in demand for its intellectual skill, cost effectiveness and technical knowledge.
A shortage of skilled professionals and availability there at higher costs increase the cost of maintaining such services in the developed country whereas the same job can be obtained with similar precision and quality and at much lesser costs by a knowledge process outsourcing company in India.
The major benefits which can be derived are described below:
o Valuable cost savings that can be utilized elsewhere.
o Trained professionals at work.
o Standard operational efficiency.
o Increase in profits.
o Savings in time and management energy for maintaining in house services.
o Option to recruit a larger work force without raising costs.
Major leading Knowledge process outsourcing company in the Eastern Province of India-
BT Associate offers Accounting, Tax & Legal processing services. http://www.btassociate.com
Global Associates offers CAD conversion and drafting services http://www.convert2cad.com
http://www.Jobs2india.com offers Back office and form processing services.
The following are the few areas which may be outsourced to a knowledge process outsourcing company:
o Research & Development
o Financial Consultancy and Services
o Business and Technical Analysis
o Business & Market Research
o Writing & Content Development
o Legal Services
o Intellectual Property (IP) Research
o Data Analysis
NEGATIVE IMPACT OF OUTSOURCING:
Unrealized cost savings: Most businesses push work overseas in the hope of cutting several costs mainly labor costs. An application maintenance professional in India earns about $ 25 per hour, compared with app $ 85 per hour in the US, according to Gartner. But business entities make a mistake by looking at saloons alone. Other hidden expenses for areas like infrastructure, travel, communications and cultural training take a share out of the wage differential. What's more, planning and start-up costs are very high, therefore, offshore deals reflecting less than a year may not pay off at all, and savings from long-term deals will emerge at slow pace.
Loss of productivity: Staff at an offshore service center in all cases will not be as productive as internal staff at outsourcing country, at least not initially. Garner offers several reasons: Staff turnover is very high in competitive off shoring markets such as in India, which in other words mean programmers there may be new and inexperienced. And service providers overseas struggle with ambiguities in the work they are assigned. Sending jobs overseas will also lower morale of employees at home, creating a drag on output.
Poor commitment and communications: Senior executives often drag out of the scene once a deal is signed. But they need to stay committed and engaged to keep morale high and strategy on track. Projects, goals, expectations etc.have to be defined clearly and in detail. On the home front, managers should explain precisely why work has been sent overseas and what benefits are expected.