Offshore outsourcing
is the practice of hiring an external organization to perform
some or all business functions in a country other than the one
where the product or service will be sold or consumed. It can be
contrasted with offshoring, in which the functions are performed
in a foreign country, whether by the foreign subsidiary of the
same company or a third-party. Opponents point out that this
sends work overseas, thereby reducing domestic employment and
domestic investment. Many jobs in the infotech sectors - such as
data entry, and customer support - have been or are potentially
affected. The general criteria for a job to be offshore-able are:
* The job does not require direct customer interaction; * 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; * There is a high wage difference between the
original and offshore countries; * The work is repeatable.
The driving factor behind this development has been the need to
cut costs during the recession that began before the events of
September 11, 2001 and deepened since then, while the enabling
factor has been the global electronic network that allows
digital data to be accessed and shipped instantly, from and to
anywhere in the world.
Some of the major countries that provide such services are India
(Programming and IT), Russia (Programming and R&D), Ukraine
(Programming and Design), Romania (Programming and IT), the
Philippines (Data Entry and Customer Support), China
(Programming), and many others.
The Trusted Pipe architecture is a preferred approach to
offshore outsourcing. It relates to the field of management of a
business and economical enterprise operation that is directed
toward creating a communications system of infrastructure and
communications networks that will enable management and
engineering personnel ("intelligent middlemen") located in
offshore areas to facilitate the exchange of economic type
assets and information among themselves. Such economic assets
should include: cultural, technical and legal rights and
remedies, software engineering and various other business
skills, from buyer to seller.
Primarily, the Trusted Pipe will manage a network of global
enterprises seeking to outsource software development and
operations offshore. There are two major types of control
points, at least one GECP that operates in the U.S. and manages
the network of global enterprises seeking to outsource software
development and operations offshore and at least one OVCP that
operates in the target country and manages the network of
outsource vendors.
The advent of the Internet has enabled individuals and small
businesses to contract freelancers from all over the world to
get projects done at a minimum cost. This trend runs in parallel
with the tendency towards big corporations' outsourcing, and may
in the future serve to strengthen small business' capacity to
compete with their bigger competitors capable of setting up
offshore locations or of arriving at major contracts with
offshore companies. See Freelancing on the Internet.
There are different views on the impact on society, which
reflects the attitude of Protectionism versus Free Trade. Some
see it as a potential threat to the domestic job market and ask
for government protective measures, while others (and not just
corporations) see it as an opportunity.
About the author:
For further information on
offshore outsourcing and
offshore software
development, please visit
http://www.a1technology.com.
