Is There Still A Future for Outsourcing?

For many years following the global recession, companies, big and small, were forced to make drastic decisions that have changed their business strategies. Some have resorted to outsourcing as a means of cutting down costs. This started the trend of outsourcing jobs to companies that can provide facilities and manpower without costing too much.

Early Beginnings of Outsourcing

Outsourcing became more popular with the advancement in technology. Companies had the chance to lower their overhead costs and employee fees further if they moved operations towards English-speaking Third World countries such as India, Sri Lanka, the Philippines and other countries within Asia-Pacific. Labor costs were fairly cheap in these areas and the skills in speaking, reading, listening and writing in English are remarkable especially in India and the Philippines.

Most of the jobs that were highly outsourced offshore are Backend Office Management, Human Resource Management, Data Processing, Finance Management and IT Solutions. This gave rise to Business Process Outsourcing (BPO) companies in several of the abovementioned countries. As of late, the industry still continues to gain popularity. However, in a 2012 survey made by Deloitte, the world’s second largest professional services network, things may take a turn in the future of this industry.

Challenges That It May Face In The Future

A number of the respondents of their 2012 Global Outsourcing and Insourcing Survey have stated their dissatisfaction with vendors of outsourced jobs. Most of them have terminated their vendors due to issues in the quality of services. It was found out that most of these vendors have underestimated the gravity and scope of their tasks. Furthermore, insourcing, though rare, is slowly occurring in many companies already. This is brought about by the steady increase of wages in countries like China and India. Although the change has not been felt by many, the steady increase in wages may push companies to move their operations back to Western Countries.

Cloud Computing and Social Media

These reasons should shake the future of the industry, right? No, not completely. Outsourcing has remained and will remain a steady standard business practice for many years to come. Especially now with such technology advancement as Cloud Computing and Social Media, more companies will find outsourced jobs easier to manage and therefore, gaining more importance. Customer Service will be outsourced more than ever, targeting Social Networks where real-time correspondence can occur between the Customer Service Representative and the customer. Companies that want to remain relevant and competitive in their market can provide rapid responses to queries, problems and complaints.

Through the use of cloud computing, the information is guaranteed secure and accessible anywhere through the use of an array of devices, including mobile devices. Data security is one of the priorities of many offshore outsourcing companies and it has created a lot of issues in negotiations between vendors and customers. With cloud computing, information can be shared rapidly through a secured network using the application software and accessed through a variety of devices. These cloud providers will allow companies to further cut down the costs for maintenance and equipment.

The Evolution Global Business Culture
Lastly, the global business culture has developed into involving both offshore and western companies. Offshore companies have continued learning how to attract and sustain their partnerships with western companies. Western companies, on the other hand, have also started to adopt expectations and standards that are friendlier to these offshore companies. Customer dissatisfaction is significantly decreased through maintaining good relations and constant communications between vendor and customer. With these two working well together, the outsourcing industry will survive and will continue to become a standard business practice for a long time.

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