News: What is the Next Wave in Offshore Outsourcing? And How High?
At first, it was offshore outsourcing of computer programming – companies sending software development as well as maintenance abroad, particularly to India. The next trend is sending claims processing, payroll processing and other back-office business tasks abroad, to destinations such as the Philippines. This is what is known as BPO – Business Process Outsourcing.
The question is, what is the volume of BPO tasks that can be sent abroad?
The additional question is; when these jobs are sent abroad, how quickly can they be accomplished? Well, this has been a matter or deliberation. These business process tasks are partially automated. In essence, they are executed with human efforts as well as technology. The costs saved on labor are still considered when these tasks are outsourced compared to doing them in-house on a per-worker basis.
However, some school of thoughts argued that these tasks also often require experience in business practices, specific industries, including local cultures. They cited an example with Dell and their customer service travails — the company sent a huge part of its call-center work abroad, India specifically, but later returned a huge part of the customer service task to be handled domestically.
According to a recent report made to NASSCOM – India’s software & services trade association, the offshore business process outsourcing shows the possibility of growing in an explosive manner in the coming years. The Everest Research Institute did research in which they discovered that the addressable market for Indian business process outsourcers is going to hit $220 billion and more in the next few years. This research institute is an outsourcing advisory firm.
Presently, the report has shown that the sum of offshore business process outsourcing (BPO) market is approximately $28 billion — and the portion of this amount sourced by India is estimated at $10.2 billion.
According to the further report by Everest’s co-researcher – Rod Bourgeois, the Indian business process outsourcing market currently is less than 5% of the likely market opportunity. So, the next wave or level when it comes to offshoring is that Indians are going beyond IT (Information Technology) to also take up business process tasks.
This bullish factor is largely dependent on the non-stop cost-savings from engaging the services of India’s skilled technical workers, compared to using workers in the United States.
For instance, a developer in India receives about $10 per hour, while a counterpart in Chicago is paid about $50 per hour. The reports also noted that the cost-benefit will linger if an American developer’s wages are increasing at 3% per annum, and an Indian counterpart’s wages grow at 15% in a year.
Daven Michaels is a New York Times Best Selling Author and CEO of the premier,re global outsourcing company 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.
Jeffrey Magee says: 
News: What is the Next Wave in Offshore Outsourcing? And How High?
At first, it was offshore outsourcing of computer programming – companies sending software development as well as maintenance abroad, particularly to India. The next trend is sending claims processing, payroll processing and other back-office business tasks abroad, to destinations such as the Philippines. This is what is known as BPO – Business Process Outsourcing.
The question is, what is the volume of BPO tasks that can be sent abroad?
The additional question is; when these jobs are sent abroad, how quickly can they be accomplished? Well, this has been a matter or deliberation. These business process tasks are partially automated. In essence, they are executed with human efforts as well as technology. The costs saved on labor are still considered when these tasks are outsourced compared to doing them in-house on a per-worker basis.
However, some school of thoughts argued that these tasks also often require experience in business practices, specific industries, including local cultures. They cited an example with Dell and their customer service travails — the company sent a huge part of its call-center work abroad, India specifically, but later returned a huge part of the customer service task to be handled domestically.
According to a recent report made to NASSCOM – India’s software & services trade association, the offshore business process outsourcing shows the possibility of growing in an explosive manner in the coming years. The Everest Research Institute did research in which they discovered that the addressable market for Indian business process outsourcers is going to hit $220 billion and more in the next few years. This research institute is an outsourcing advisory firm.
Presently, the report has shown that the sum of offshore business process outsourcing (BPO) market is approximately $28 billion — and the portion of this amount sourced by India is estimated at $10.2 billion.
According to the further report by Everest’s co-researcher – Rod Bourgeois, the Indian business process outsourcing market currently is less than 5% of the likely market opportunity. So, the next wave or level when it comes to offshoring is that Indians are going beyond IT (Information Technology) to also take up business process tasks.
This bullish factor is largely dependent on the non-stop cost-savings from engaging the services of India’s skilled technical workers, compared to using workers in the United States.
For instance, a developer in India receives about $10 per hour, while a counterpart in Chicago is paid about $50 per hour. The reports also noted that the cost-benefit will linger if an American developer’s wages are increasing at 3% per annum, and an Indian counterpart’s wages grow at 15% in a year.
Daven Michaels is a New York Times Best Selling Author and CEO of the premier,re global outsourcing company 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.
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