The delegation of business processes to an external vendor is known as outsourcing. The industry is experiencing tremendous growth with an increase in the number of companies outsourcing both high and low-end jobs. I feel that outsourcing is the way to go if businesses are to compete successfully in the international market. As one of the main aspects of globalization, outsourcing helps businessmen to take control of their businesses. They are able to delegate non-core business processes to external parties and concentrate on important aspects of their business. This leads to increased productivity, lower cost of operation, and access to world-class technology.
The aim of every business is to make a profit, through increased sales and low production costs. Today, many businesses across the world are affected by the rising cost of energy, high taxation, lack of cheap labor, high competition, and lack of raw materials leading to high production costs. In order for businessmen to cushion themselves against these shortcomings, they have to find a way of balancing the situation and this is where outsourcing comes in. In the United States, for example, many businesses are relocating their production to China where the cost of production is low compared to the US. There is plenty of raw material, cheap labor, favorable tax incentives, and a wide range of world-class technology. In principle, outsourcing is the answer to many of the problems facing businesses across the world.
I feel that political leaders should be handling the issue of outsourcing differently instead of politicizing it too much. This topic elicits heated debate in the political arena for “taking away” jobs from the people. Many are the time when the issue of outsourcing has been used to gain political mileage. It is high time that politicians approach the topic from a different perspective and see it through the eyes of businessmen.
They should understand that for a business to sustain itself, it has to be profitable. Many businesses have survived turbulent economical times only through outsourcing. On the other hand, businessmen must be sensitive to the need of the country. The need for job creation by the business can not be wished away. Businessmen must outsource outside their country only when it is very necessary. Those services that can be sourced from within the company or country should not be taken to shores destinations.
Outsourcing has directly affected a close friend of mine in a positive way. Alex has a car dealership business in three States, employing over 50 people. Over the years, he has been spending a lot of money to hire accountants to process employee payrolls. It was not until mid-last year when he decided to outsource the payroll processing service from a company based in Indian. He is no longer worried about the payroll issue as the company in India takes care of everything in time, at a low cost compared to what he was paying before.
Advantages of Outsourcing. 2008. Web.
Outsourcing. 2008. Web.
Ron Hira and Anil Hira. 2005. Outsourcing America: What’s Behind Our National Crisis and How Can We Reclaim American Jobs, New York, AMACOM Publishers.