An article in The Wall Street Journal (Feb 11, written by Jackie Range) referred to a study by consultants McKinsey & Co. and Nasscom, the Indian tech and outsourcing industry group. The study found that, on average, company back offices -- or "captives," as they are called in the outsourcing industry -- were less efficient than companies run by outsourcing firms that specialize in the business.
The costs for some types of back office work was 30% higher. The survey also found that the higher costs did not lead to lower staff turnover or better-quality work.
A few years ago, it made sense to set up units in India and shift the work there. Costs were cut by about 45% motivating companies such as Goldman Sachs and J.P. Morgan Chase to set up back offices and employ thousands of workers. The times are changing.
After the initial period where benefits were substantial, office space jumped and salaries began to rise. In addition, staff turnover increased and companies had to spend money on recruiting and training.
While India remains a low cost destination, other locations are looking attractive, including Vietnam and Colombia. Our company GO Global is always looking for new low cost offshore locations where there is a ready supply of qualified workers with skills in accounting and data processing.
Particularly in recessionary times, our main goal is to help our clients prosper by keeping costs low on non-core business processes and keeping quality high.
Wednesday, February 13, 2008
Friday, January 18, 2008
Outsourcing in Recession Times
From the looks of things, we are going to have a struggling economy in 2008 at best, and a full-blown recession at worst. Financial prognosticators are still mixed on whether or not to call the slowdown a recession, but if this isn't a recession, then I don't know what is. People are strung out on credit card debt and having trouble paying their bills on time. The equity in their houses has diminished and they can no longer draw upon that to shore them up. Their investment portfolios are not generating any supplemental income, either, as the stock market keeps plummeting.
Meanwhile, prices are rising everywhere we shop, including the supermarket. Eating out has become a major extravagance. On the up side, we can get a good deal on a new car and cheap upgrades on our cell phones. There are great sales on clothing, but we buy more than we need. Well, I could go on and on.
Companies in every sector at every level are making plans to lay off employees. How can outsourcing help hold the bottom line? Many business processes that have been done internally can be outsourced, which can save business owners a substantial amount of money. Most outsourcing providers can perform business processes at about 50% of what it would normally cost to do the function internally.
Take accounting and data processing, for example, a typical administrative function in any business. Our company, GO Global, provides high-quality BPO services at a cost that can amount to a savings of 50% to 60%. Besides cost savings, outsourcing is part of a strategic business plan to create a more streamlined organization positioned for growth.
Other benefits are reductions in capital expenditures and fixed assets, an increase in control of operating costs, and improved speed of information and response time. Maybe we need to stop worrying so much about 2008 and look at the bigger picture. Isn't it time to institute change that will put your business in a growth mode for the next decade?
Meanwhile, prices are rising everywhere we shop, including the supermarket. Eating out has become a major extravagance. On the up side, we can get a good deal on a new car and cheap upgrades on our cell phones. There are great sales on clothing, but we buy more than we need. Well, I could go on and on.
Companies in every sector at every level are making plans to lay off employees. How can outsourcing help hold the bottom line? Many business processes that have been done internally can be outsourced, which can save business owners a substantial amount of money. Most outsourcing providers can perform business processes at about 50% of what it would normally cost to do the function internally.
Take accounting and data processing, for example, a typical administrative function in any business. Our company, GO Global, provides high-quality BPO services at a cost that can amount to a savings of 50% to 60%. Besides cost savings, outsourcing is part of a strategic business plan to create a more streamlined organization positioned for growth.
Other benefits are reductions in capital expenditures and fixed assets, an increase in control of operating costs, and improved speed of information and response time. Maybe we need to stop worrying so much about 2008 and look at the bigger picture. Isn't it time to institute change that will put your business in a growth mode for the next decade?
Friday, January 11, 2008
A Strategic Guide to Outsourcing
Good morning,
Small and medium-sized businesses can benefit from the new book we are publishing, The Phoenix Paradigm, Redesigning Your Business for the 21st Century. The book is all about how to outsource your non-core business functions, such as accounting and data entry.
Outsourcing has become one of the most predominant business models of our times. If it is properly implemented, outsourcing can become an incredibly cost-effective business management tool that can streamline your organization and make it more efficient and productive.
The motivation to outsource is quite simple -- reducing costs, access to a strong labor pool, and adding value and efficiency. We believe that the small and mid-market enterprise sector is ready for outsourcing and we want to show them how to do it.
Look for more posts on our new book on outsourcing, The Phoenix Paradigm. The phoenix bird rose from the ashes and so can you.
Arlene Hauben
Director of Marketing
Global Outsourcing, Inc.
Small and medium-sized businesses can benefit from the new book we are publishing, The Phoenix Paradigm, Redesigning Your Business for the 21st Century. The book is all about how to outsource your non-core business functions, such as accounting and data entry.
Outsourcing has become one of the most predominant business models of our times. If it is properly implemented, outsourcing can become an incredibly cost-effective business management tool that can streamline your organization and make it more efficient and productive.
The motivation to outsource is quite simple -- reducing costs, access to a strong labor pool, and adding value and efficiency. We believe that the small and mid-market enterprise sector is ready for outsourcing and we want to show them how to do it.
Look for more posts on our new book on outsourcing, The Phoenix Paradigm. The phoenix bird rose from the ashes and so can you.
Arlene Hauben
Director of Marketing
Global Outsourcing, Inc.
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