Outsourcing in Asia

Outsourcing has remained a growing field through good economic times and bad. What makes this such an attractive option to businesses worldwide? What is it about the Asian economies that make them such outsourcing magnets?

There are many reasons for this phenomenon to include the following:

Bottom Line – For most businesses, the first and foremost consideration is the bottom line. Put simply, outsourcing makes the bottom line look good. It offers various cost savings such as a reduction in fixed costs, lower labor costs and savings in research and development. The services and goods offered by such businesses then cost less. As the benefits of the cost savings can be passed on to the public, firms that outsource then have an edge over the competition.

Availability of Labor – Often businesses find it difficult to get a talented workforce that can meet the skills required for their operations without excessive drain on their finances. The large, skilled workforce available in Asian economies makes outsourcing a very attractive choice.

Regain Focus – A lot of the routine work involved in the day to day operation of a business such as accounting often has nothing to do with the product or services offered by the business. Even services such as customerOutsourcing in Asia support that are crucial to a company’s product lines can be a heavy financial burden on the company. By taking on these routine tasks, outsourcing allows a company to regain its focus on its core operations

Target New Markets – Outsourcing to Asia has helped several businesses to break into new markets that they had no access to earlier. Outsourcing helps build awareness about the company in the target markets, and it can give great exposure to the products and services that the company can provide to consumers in these new markets.

Customized Services – Outsourcing in emerging markets often offers companies a way to explore the possible customization of services and products for those markets and eventually grab a foothold in them.

A combination of these factors and others have made outsourcing to Asia such a great success that many businesses are turning to this option in an effort to be competitive in the face of such stiff opposition at home.

Asian Outsourcing Controversy

Most people are aware of the negative buzz that outsourcing is creating – particularly in these days of high unemployment. Outsourcing to Asia – especially to countries such as China, India and Philippines has generated some controversy in recent years. Is it really bad for jobs?

Every nation has many advocates for keeping jobs within the country, and when people see the rising numbers of unemployed white collar professionals; it may seem like a good thing to oppose outsourcing. But is this really the best thing to do? The answers to this question can be arrived at by taking another look at why organizations opt for outsourcing in the first place and why, even in these days of fiscal turmoil, organizations worldwide are still resorting to outsourcing.

Contrary to popular perception as being a phenomenon of the information age, outsourcing has always been around. Industries have often chosen to outsource a part of their work for various reasons, the most common of which are lack of in-house expertise and cost-effectiveness. Outsourcing of manufacturing and blue-collar jobs has long been an accepted practice; but with the increasing globalization of services and business operations, many white-collar jobs have been outsourced to Asia too. This has come as a shock to many people who have been ardent supporters of outsourcing. The flight of high-value and high-paying jobs, coupled with the slow rate of regeneration of such jobs, has brought home the fact that this aspect of globalization is not really palatable to most people.

Asian Outsourcing The cry for stopping this flight of jobs has been getting louder, but there is no gainsaying the fact that there are definite benefits to be gained from outsourcing work – it can bring lower the operating costs for one thing, and the end result can be reduced costs of goods and services with a concurrent increase in the purchasing power of consumers. The diversity and savings it brings can make companies more competitive, spawn entire new industries and boost the economy in time in various ways that are not apparent in the short term.

Furthermore, the jobs that have been outsourced are a source of prosperity and upward mobility to many skilled beneficiaries in these Asian countries. These beneficiaries in turn provide new markets. For businesses that outsource, it is a win-win situation too, as they have access to a vast pool of skilled labor that may not have parallels in their own country and more consumers to buy their products.

Of course, nobody wants to be an outsourcing statistic. Such workers have to either be retrained to get other well-paying jobs or to spend a long time on unemployment because similar jobs are not being generated at the same place or pace as they are being lost. Until the worldwide economy picks up strongly, the cry over outsourcing to Asia is unlikely to subside.