Business Strategies Taken by IT outsourcing Companies

Business Strategies Taken by IT outsourcing Companies

After the implementation of the LPG that is Liberalization, Privatization and Globalization, areas of social or economic policy have been dissolved. Now we are free to trade our products and services to any other cities and countries across the globe, crossing the interface of our country. The predominance of e-governance has made the job easier. E-governance has intensified Marshall McLuhan’s concept of global village that enables these IT outsourcing companies in their core focus on glocalization. It has helped them to manage the core functions from a distant place or a different country. Now by the governance of the internet, i-phone and mobile phone, we can take our online vendors to any viewer belong to any part of the world. Now let me get into our main area of outsourcing.

The term “outsourcing” is used for contracting out business function to an external organization or a business entity that is far from our shore or land.

To be more precise, when a project or a business function is delivered to an entity or company outside the country is called off shoring or offshore outsourcing. This concept of outsourcing helps the outsourcing companies to perform better in their core competencies. In the present day marketplace, the post recession and economic-meltdown-period, as businesses are not sure whether their investment in proffered niches will prove beneficial for them or not, they are starting their niches with limited hands and getting their ancillary parts done by other entities or companies located in offshore countries. If they find their selected niches are beneficial and profitable for them, they look for more hands or full supports in these niches.
There are generally three types of IT outsourcing companies commonly found across the globe.

They are as follows:

  • Technology Services Outsourcing (TSO)
  •  Business Process Outsourcing (BPO)
  • III) Knowledge Process Outsourcing (KPO)

Business Strategies Taken by IT outsourcing Companies:

Low Labor Cost: Low Labor Cost is the main benefit achieved by IT outsourcing companies. The labor cost of the developing countries being lower than the developed countries, outsourcing companies belong to developed countries prefer to outsource their project or business functions from developing countries. Besides, IT outsourcing companies, sometimes, hire manpower at low price from the developing countries. Thus they are able to utilize the human resource of a country located far away from their countries.

Low Production and Development Charge: As efficient intellects are easily available at the very low cost in developing countries and the availably other required resources are easily available at cheap rate, it helps IT outsourcing companies offer business function at the very cheap rate. Thus they get position in this competitive business world.

Low Capital Investment: At the early period of a project or a business workshop, it is tough enough for a company to invest a huge amount of money. Outsourcing helps the companies to cut down their capital investment. Besides, if a company goes to take part in every step and function required to complete a project, it becomes more expensive that results in unsatisfied customers. Say for example if a company performs all functions like research, market survey, development, distribution and marketing by itself for the success of a project, it becomes highly expensive.

Increase efficiency: Outsourcing helps in increasing efficiency. It is an undeniable fact that a company may not have much strength in its every sector or every part required for marketing a product or service. So it can take the advantage of outsourcing by distributing overhead workload to the IT outsourcing companies. Besides, by outsourcing its weaker part a company can increase its efficiency and provide high quality work that results a satisfied clientele.

Save Additional Cost:

Outsourcing helps the companies to cut down their costs of hiring more employees to take part in every step of its business. It helps to reduce additional costs on insurances, taxes and other employee related benefits and expenses.

Launch new project in right way: Without hiring more employees and more investment, outsourcing companies launch new projects easily at their first attempt at the very low cost.

Save Time: As outsourcing helps to get satisfactory services without any new set up or going through a long process of requirement, training and understanding of requirements, it save time to make a project successful.

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