Outsourcing! For some it is an economic explosion and for some, an awful nightmare. For years, outsourcing has been a sizzling topic of debate among countries’ politicians. What exactly is outsourcing and why it has been considered more of an issue rather than an advantage? Let’s find out.
Well, outsourcing is an ongoing practice of farming out or delegating various jobs outside the country you reside. Or in other words, outsourcing is a trend of global delegation that has ignited a firestorm of controversy, from newspapers to TV channels, magazines to blogs at Internet; you will find enormous discussions on the same.
Nowadays, more and more companies are outsourcing their jobs overseas and taking full advantage of time, cost, and quality. However, disputes on delegation of jobs to an alien country are still firm at their place. Let’s consider people who are making out of outsourcing. The companies themselves come at the top of beneficiaries of outsourcing. US companies have to pay comparatively high taxes and wages. Thus, the cost for a product automatically goes high. But if the same company ties up with an Indian company and employs an offshore dedicated team as the virtual extension of their own staff, it has to pay lower wages, lower taxes, can get products manufactured at a lower cost.
Global outsourcing allows software development companies to take advantage of, talented workforce, specialized knowledge and emerging technologies at relatively lower costs. These companies hire those who lead an industry, leverage a more competitive advantage in the market place and thus, make more money in the long run. Apart from the companies, consumers too remain at the advantageous side of outsourcing as they have to pay less for the products. Another advantage, you provide jobs to people overseas who otherwise wouldn’t be working.
This example presents a win-win proposition for all; however, reality is something else. To understand the controversy, we need to look at the other face of coin i.e. the American workers who are highly annoyed from outsourcing trend. Well, it is very genuine as more the trend is rising high more jobs are slipping out of Americans’ hands. They can’t just move to India and even if they do so, wages in India would be nothing compared to what they were getting in US. This example gives a clear idea that hundreds of people have suddenly come out of work because of outsourcing. Things don’t end here only. Just broaden the effect and see. People who have lost their jobs will spend less. Markets, restaurant, malls will be affected as they will be having lesser sales and thus, overall economy may face recession.
Well, above discussion seems right from both points of views and can not be concluded at a single outcome. But we can’t deny the fact that IT outsourcing has become a multi-billion dollar business for almost all established software development companies located in major IT countries. It is just assumed that firestorm of controversy over outsourcing will subside with time as the trend of outsourcing has bright prospects and is likely to expand in future.