Outsourcing To India: Is The United States Benefiting From It?

2382 words - 10 pages

Outsourcing to India: Is the United States benefiting from it?

I. Introduction

“Did you hear the news? No, what happened? We are shipping all of the IT jobs to India …” Water cooler conversations are beginning to sound more and more like this. Outsourcing of jobs has become a major concern for employees at large corporations (technical or financial). The economic drought that the United States faced in 2000 to late 2001 led to numerous cost-cutting measures, but none more effective than that of outsourcing. The outsourcing of jobs is now a necessity in the United States, so companies are forced to send jobs to places such as India to keep costs down, all the while trying to balance the advantages and disadvantages of the move.

II. Background

In order to thoroughly grasp the significance of outsourcing to India, it is important to review the basics of outsourcing. Outsourcing is formally defined as the procuring of services or products, such as parts or labor, from an outside supplier/manufacturer in order to cut costs. In more simple terms, using services (usually labor) that cost less. There are five important questions when dealing with outsourcing: who, what, when, where and why[1]. Why you should outsource will be addressed later on, so this section will focus on answering the other questions.

Who should outsource? If you can remotely benefit from outsourcing, then you should do it. This includes entrepreneurs, home offices and small businesses all the way up to large corporations. At the current pace that technology is evolving, costs need to be kept down in order to provide the maximum advantage to a company.

What should be outsourced? Currently, it only makes sense to outsource items that are in the technology field, but this can be expanded to almost any industry. Anything vaguely related to the Web can be outsourced, including web solutions, web development, web design, website security, website maintenance, and the list goes on. Other services that are currently being outsourced fall under the category of business process outsourcing (BPO) which includes payroll, billing, accounting, telemarketing and call centers. At this rate, almost every corporation will have main operations being done in a foreign country with management staying in the United States.

When should you outsource? If you are losing focus on your core business because you are too busy handling operations or if you are facing a time, money or human resource crisis, outsourcing is a solution[2]. Outsourcing can also allow you to be the first one in your market to gain that important edge to put you over the top. However, the main reason for outsourcing is that a mission-critical project needs to be finished, but there is a lack of specialized personnel to finish the project. Outsourcing is not done only to save money, but because the specialization is necessary for certain products.

Where should you outsource? When companies are...

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