Outsourcing – a concept which took the world of business by storm a few years ago – is slowly becoming a more complex arena, say experts. In the beginning it was pretty simple: Certain business-related activities which are too expensive or cumbersome to be carried out in-house, is taken care of by an external agency specializing in the area. The primary benefits included specialized skills and cost savings – especially if the outsourcing is done to a foreign destination where labor and infrastructure are significantly cheaper.
Asia in general, and India in particular, has traditionally been one of the leaders in outsourcing destinations, primarily due to the savings in labor and availability of certain specialized skill sets like IT. However, this is slowly beginning to change, if recent trends in the industry offer a reliable clue. Take our own IT services scenario as an example - the increased demand for IT skill sets in Asia have driven up the costs incurred in hiring and sustaining an IT professional. Similar is the case with business infrastructure, where the costs have skyrocketed for the same reason. As a result, IT service organizations are compelled to drive up their prices and hence the companies wanting to take advantage of outsourcing are beginning to realize that there is little or no ‘advantage’ left!
Think of it as inflation: Costs drive up prices, which in turn drive up costs – to put it simply. This has recently begun to have significant effects on outsourcing. Last year, New Call Telecom, a British organization dealing in telecommunications, was in the news for recognizing this and actually taking steps towards this. The company has scrapped its plans for a call center in India, and instead set it up back home in Lancashire! Also, countries like Brazil, China and Egypt are the new contenders for ‘favorite IT destination’.
The IT outsourcing industry is changing fast. We, the people, must essentially change with it.
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