Offshore outsourcing

Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured. A service is the non-material equivalent of a good. A service provision is an economic activity that does not result in Ownership, and this is what differentiates It can be contrasted with offshoring, in which the functions are performed in a foreign country by a foreign subsidiary. Offshore may refer to oil and Natural gas production at sea see Oil platform. Opponents point out that the practice of sending work overseas by countries with higher wages reduces their own domestic employment and domestic investment. A wage is a compensation workers receive in exchange for their labor. Many customer service jobs as well as jobs in the infotech sectors (data entry, computer programming, and customer support) in countries such as the United States and the United Kingdom - have been or are potentially affected. Information technology ( IT) as defined by the Information Technology Association of America (ITAA is "the study design development implementation support Technical support (also tech support) is a range of services providing assistance with technology products such as mobile phones televisions Computers The United States of America —commonly referred to as the The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located

1 Types
2 Criteria
3 Countries involved
4 Impact of the Internet
5 Source of conflict
6 Sources
7 See also
8 External links

Types

There are four basic types of offshore outsourcing:

ITO — information technology outsourcing
BPO — business process outsourcing covers things like running call centers, processing insurance claims. Business process outsourcing ( BPO) contains the transmission of processes along with the associated operational activities and responsibilities to a third party with at least
Software R&D — offshore software development
KPO - knowledge process outsourcing covers things that require a higher skill set such as reading X-Rays, performing investment research on stocks and bonds, handling the accounting functions for a business or executing engineering design projects. Offshore Software R&D is provision of Software development services by an external supplier positioned in a country that is geographically remote from the client enterprise Knowledge process outsourcing (KPO is a form of Outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a

Criteria

The general criteria for a job to be offshore-able are:

There is a significant wage difference between the original and offshore countries;
The job can be telework;
The work has a high information content;
The work can be transmitted over the Internet;
The work is easy to set up;
The work is repeatable. Telecommuting, e-commuting, e-work, telework, working at home (WAH, or working from home (WFH is a work arrangement in The Internet is a global system of interconnected Computer networks

The driving factor behind the development of offshore outsourcing has been the need to cut costs while the enabling factor has been the global electronic internet network that allows digital data to be accessed and delivered instantly, from and to almost anywhere in the world.

Countries involved

Some of the major countries/districts that provide such services are India ( Full Spectrum Services ), Ukraine (Programming and R&D), Brazil (Web & Software Programming,Game Development,IT Support,Network Solutions,Offshore Outsourcing Service), Argentina (Web & Software Programming,Game Development,IT Support,Network Solutions,Offshore Outsourcing Service),Indonesia (Programming, Data Entry, Customer Support), China (Programming, Data Entry, Customer Support, F&A), Philippine (Customer Support, Programming, Animation, Transcription), Russia (Programming and R&D), Pakistan (Programming, Customer Support), Panama (Programming, Customer Support), Nepal (Programming, Customer Support), Bangladesh (Web & Software Programming,Game Development,IT Support,Network Solutions,Offshore Outsourcing Service), Bulgaria (Programming and R&D), Belarus (Programming, R&D), Romania (Programming and IT), the Philippines (Programming, R&D, Data Entry and Customer Support), [[Egypt](Customer Support and Programming), Malaysia (Customer Support and R&D), and many others. India, officially the Republic of India (भारत गणराज्य inc-Latn Bhārat Gaṇarājya; see also other Indian languages) is a country Ukraine (Україна Ukrayina, /ukrɑˈjinɑ/ is a country in Eastern Europe. |utc_offset = -2 to -4 |time_zone_DST = BRST |utc_offset_DST = -2 to -5 |cctld For a topic outline on this subject see List of basic Argentina topics. The Republic of Indonesia ( (Republik Indonesia is a Country in Southeast Asia. China ( Wade-Giles ( Mandarin) Chung¹kuo² is a cultural region, an ancient Civilization, and depending on perspective a National The Philippines ( Filipino: Pilipinas, officially known as the Republic of the Philippines (fil ''Republika ng Pilipinas'' RP Russia (Россия Rossiya) or the Russian Federation ( Rossiyskaya Federatsiya) is a transcontinental Country extending Pakistan () officially the Islamic Republic of Pakistan, is a country located in South Asia, Southwest Asia, Middle East and Panama, officially the Republic of Panama (República de Panamá) is the southernmost country of Central America. Nepal (नेपाल) is a Landlocked country in South Asia. ( Bengali: বাংলাদেশ inc-Latn Bangladesh) officially The state of Bulgaria (България transliterated bg-Latn ''Balgaria'' The country preserves the traditions (in ethnic name language and alphabet of the First Bulgarian Belarus ( Belarusian Беларусь / Biełaruś is a Landlocked country in Eastern Europe, bordered by Russia to the north and east Romania ( dated: Rumania, Roumania The Philippines ( Filipino: Pilipinas, officially known as the Republic of the Philippines (fil ''Republika ng Pilipinas'' RP For the biogeographical region see Malesia Malaysia (məˈleɪʒə or /məˈleɪziə/ is a country that consists of thirteen states and

Impact of the Internet

The widespread use and availability of the Internet has enabled individuals and small businesses to contract freelancers from all over the world to get projects done at a lower cost due to lower wages and property prices. A freelancer, freelance worker, or freelance is a person who pursues a profession without a long-term commitment to any one employer Crowdsourcing systems such as Mechanical Turk have added the element of scalability, allowing businesses to outsource information tasks across the Internet to thousands of workers. Crowdsourcing is a Neologism for the act of taking a task traditionally performed by an employee or Contractor, and Outsourcing it to an undefined generally The Amazon Mechanical Turk (MTurk is one of the suite of Amazon Web Services, a Crowdsourcing marketplace that enables computer programs to co-ordinate the use of

This trend runs in parallel with the tendency towards outsourcing in larger corporations, and may serve to strengthen small business' capacity to compete with their larger competitors capable of setting up offshore locations, or of arriving at major contracts with offshore companies. See Freelancing on the Internet.

Source of conflict

There are different views on the impact on the various societies affected, which reflects the attitude of Protectionism versus Free Trade. For the protectionist Australian political party from the 1880s to 1909 see Protectionist Party Free trade is a system in which the trade of goods and services between or within countries flows unhindered by government-imposed restrictions Some see it as a potential threat to the domestic job market in the developed world and ask for government protective measures (or at least closer scrutiny of existing trade practices), while others, including the countries who receive the work, see it as an opportunity. Free-trade advocates suggest economies as a whole will obtain a net benefit from labor offshoring, but it is unclear if the displaced receive a net benefit.

One issue offshoring of technical services has brought more attention to is the value of education as an alleged solution to trade-related displacements. Education may no longer be a comparative advantage of high-wage nations because the cost of education may be lower in the nations involved in the controversy. In international trade the principle of comparative advantage refers to the fact that although one country may have an absolute disadvantage with another value can be created for both [1] While it is true that education is usually considered helpful to competitiveness in general, an "education arms race" with low-wage nations may not pay off. The term arms race, in its original usage describes a competition between two or more parties for real or apparent military supremacy

Sources

Economist. Com Recommendations from November 11, 2004 Special Survey Edition

For a new topic, outsourcing has produced a huge volume of research, not all of it worthwhile. Here is a sprinkling of some of the better stuff:

From the McKinsey Global Institute

“Offshoring: Is It a Win-Win Game?”, August 2003

“New Horizons: Multinational Company Investment in Developing Economies”, October 2003

“Can Germany Win from Offshoring?”, Diana Farrell, July 2004

“Exploding the Myths of Offshoring”, Martin Baily and Diana Farrell, July 2004

From the Boston Consulting Group

“China: The Pursuit of Competitive Advantage and Profitable Growth”, July 2003

“Capturing Global Advantage”, April 2004

Academia

“The New Wave of Outsourcing”, Ashok Deo Bardham and Cynthia Kroll, University of California at Berkeley, Fisher Centre for Real Estate and Urban Economics Research Report, Fall 2003

“Globalisation of IT Services and White Collar Jobs: The Next Wave of Productivity Growth”, Catherine Mann, Institute for International Economics, December 2003

From The Brookings Institute

“Offshoring Service Jobs: Bane or Boon - and What to Do?”, Lael Brainard and Robert Litan, April 2004

“Offshoring, Import Competition, and the Jobless Recovery”, Charles Schultze, August 2004

“The Outsourcing Bogeyman”, Daniel Drezner, Foreign Affairs, May/June 2004

“Hardheaded Optimism About Globalisation”, Amar Bhide, Columbia University, forthcoming

From the Bureau of Labour Statistics

“Occupational Employment Projections to 2012”, Daniel Hecker, Monthly Labour Review, February 2004

“The 1988-2000 Employment Projections: How Accurate Were They?”, by Andrew Alpert and Jill Auyer, Occupational Outlook Quarterly, Spring 2003

From Forrester

“3. 3m US Services Jobs To Go Offshore”, John McCarthy, November 2002

“Low-Cost Global Delivery Model Showdown”, John McCarthy, August 2004

“Two Speed Europe: Why 1 Million Jobs Will Move Offshore”, Andrew Parker, August 2004

External links

Outsourcing is Subcontracting a process such as product design or Manufacturing, to a Third-party company Offshore may refer to oil and Natural gas production at sea see Oil platform. Nearshoring means Sourcing service activities to a foreign lower-wage country that is relatively close in distance or time zone (or both The globally integrated enterprise is a term coined in 2006 by Sam Palmisano, CEO of IBM Corp used to denote a company that fashions its strategy its management This is a list of International trade topics. Absolute advantage Agreement on Trade-Related Aspects of Intellectual Property Rights In its narrowest definition a labor shortage is an economic condition in which there are insufficient qualified candidates (employees to fill the market-place demands Free trade is one of the most debated topics in economics of the 20th and 21st century. Offshore may refer to oil and Natural gas production at sea see Oil platform. Definitions Borderless selling is defined as the process of performing Sales transaction between two or more parties from different countries (an Exporter expatriate foreign worker is a person who works in a country other than the one of which he or she is a Citizen. Offshore may refer to oil and Natural gas production at sea see Oil platform. Business process outsourcing ( BPO) contains the transmission of processes along with the associated operational activities and responsibilities to a third party with at least Offshore Software R&D is provision of Software development services by an external supplier positioned in a country that is geographically remote from the client enterprise

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