From:datamouth

The benefits of Outsourcing to Americans show that the Consumers are provided with the services they demand, at lower prices. As many businesses themselves purchase services, their lower costs will result in savings that can be passed on to consumers. If a capable radiologist in India can read x-ray pictures at a quarter of the cost of doing so domestically, important health- care services can be delivered at lower cost to everyone, putting a brake on exploding medical costs.U.S. exporters of goods and services are benefited from the extra income generated abroad. The outsourcing of services to India counts in the U.S. balance of payments as an import of services. If we are going to start importing large amounts of such services, these imports must be paid for by exports of something. The dollars being spent by firms to purchase these services will come back to the U.S. either in the form of demand for U.S. goods (our exports to India) or foreign investment in the U.S. As McKinsey has noted, "[service] providers in low-wage countries require U.S. computers, telecommunications equipment, other hardware and software. In addition, they also procure legal, financial, and marketing services from the U.S."

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From: cpim

OFFSHORING, or the outsourcing of services by developed country firms to captive units or independent suppliers in developing countries has for some time now been a source for controversy in the developed countries, especially the US. Arguments that such offshoring involves not just the transfer abroad of new job opportunities that would have arisen in the developed countries, but the loss of existing jobs in the US to offshore locations abound. They derive their strength from reports that specific corporations have been reducing or plan to reduce their workforce in developed-country locations, even while expanding them in developing countries such as India. In the event, calls for protectionist responses that limit and roll-back the offshoring of services have increased dominate the US debate. On the other hand, firms clamouring to retain their tax holidays despite booming profits present outsourcing as the route to India’s economic salvation.

The recently released Annual Trade Report of the WTO provides an occasion to revisit these arguments, because a special chapter in the report focuses on offshoring of IT services and argues that: (i) the extent of net offshoring is exaggerated; and (ii) that to the extent that offshoring occurs its negative effects on the source country and positive benefits for the host country have also both been exaggerated.

BENEFITS EXAGGERATED
The WTO’s argument begins with pointing to the extremely shaky and predominantly private sector generated database on the phenomenon. In some cases as in India, even official information as available in the balance of payments statistics is collected and collated by a private body --- in this case the National Association of Software and Services Companies (NASSCOM).

While recognising the private nature of the sources of these statistics, the WTO, for lack of an alternative, places IT and software expenditure worldwide in the order of 650 to 710 billion dollar in 2003. Total outsourced IT services (excluding software) are paced at around 285 billion dollar. Offshored IT and BP services are estimated to have been in the order of 40 to 45 billion dollar in 2003. This places offshored IT and BP services at just 2.5 per cent of world commercial services exports, valued at 1,800 billion dollar and at a meagre 0.125 per cent of world GDP valued at 36,000 billion dollar. No one can claim that this is enough to disrupt economic activity and employment in the developed countries.

The point is that even of this, the share offshored to captive units is quite substantial according to available estimates. According to the WTO: “Many surveys confirm that at present, most offshoring takes the form of captive offshoring. This view is supported by data on US IT services imports. In 2003, affiliated trade (or form US subsidiaries or joint ventures abroad) accounted for 63 per cent of US computer and information services imports, and for 77 per cent of US imports of other business, professional and technical services, a proxy for business process services.”

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From: webnewswire

Studies show that, there are two main criteria which should be considered while choosing any offshore outsourcing provider. One is local attractiveness of software outsourcing industry and second is the capability of workers. In India, software industry is the high paying industry and that itself makes it most attractive industry. While offshore outsourcing was started in way back 90's, it has grown and matured now to provide quality software development as per any standards. And Indian companies are very much interested in maintaining their quality. Highest numbers of CMM Level 5 companies are in India at present. On the other hand, other countries are not matching above criteria.Majority of fortune 500 companies are considering India as their preferred destination for software outsourcing. India has emerged as a 'value-for-money' destination that has both cost advantage and quality that matches the expectation of global multinational companies. Indian universities are producing above 3 million graduates and around 300,000 post graduates every year. Software outsourcing industry is the highest paying industry in India. So large percentage of these students choose offshore software development company as their destination. But India is not just about number of graduates. Every CEO or CIO wants maximum return on his investment and reduce the cost. So more and more companies in developed countries are sending their software development requirements to low cost software outsourcing companies in India. Advantage India has achieved in software outsourcing is not overnight. Offshore Outsourcing has grown and matured with time. In 90's, companies like GE, Citibank and British Airways started outsourcing to India and till then it has gone through many phases to compete with the best. After Initial phase, companies like Nortel and Lucent started to outsource product development to speed it up and market faster. During this time, Indian majors like Wipro and Infosys also started. In the second phase Y2K bug gave lot of work to Indian companies and gave them enough finance to grow. And with that, they started in service provider section as well as in enterprise application development. Next wave was of BPO Industry which is till going on and supply is not meeting the demand. And along with these, software outsourcing is increasing continuously. According to McKinsey, software outsourcing will increase 30-40% every year for next five years. According to Forrester research, around 3.3 million white collar jobs will be outsourced by 2015. And according to Deloitte research, two million financial sector jobs will be outsourced by 2009. And major chunk of this software outsourcing and other jobs are coming to India.

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From: tmcnet

It’s no secret that offshore outsourcing is a hot topic now.
A recently released report issued by research and consulting firm Ventoro does an excellent job of cutting through the miasma. The company’s 2005 Offshore Outsourcing Report is the result of a survey of more than 5,231 executives in North America and Europe who were considered prime buyers of outsourced services originating from offshore (3,139 in the U.S.).Currently, only 19 percent of all companies in the U.S. and Europe are engaging in offshore outsourcing, a number much lower than the public’s perception. However, when looking at the Fortune 1000, this number jumps to a rather staggering 95 percent. Some notable findings from the study:
• Offshore outsourcing ventures seldom fail because of a single factor; more often than not it’s a combination of issues.
• Of those companies with existing offshore strategies, 72 percent planned to increase their spending on offshore. Only 10 percent of companies were planning to decrease their spending.
• For companies that chose not to move business offshore, they indicated it was primarily because of perceived security issues and quality.
• Aggregate estimates of cost savings realized because of the offshore model were calculated between 10 and 19 percent, depending on different factors. These numbers are significantly lower than the numbers that had been expected by the organizations following offshore strategies.
• The report indicates that when offshore outsourcing is done properly, a realistic cost savings rate of about 30 percent is a reasonable expectation.

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From: hindubusinessline

OFFSHORING, or the outsourcing of services by developed country firms to captive units or independent suppliers in developing countries, has for some time now been a source for controversy in the developed countries, especially the US. Arguments that such offshoring involves not just the transfer abroad of new job opportunities that would have arisen in the developed countries, but the loss of existing jobs in the US to offshore locations abound.
They derive their strength from reports that specific corporations have been reducing or plan to reduce their workforce in developed-country locations, even while expanding them in developing countries such as India. In the event, calls for protectionist responses that limit and rollback the offshoring of services have increased.
WTO has decided to come out on the issue which argues that: i) the extent of net offshoring is exaggerated; and ii) to the extent that offshoring occurs, its negative effects on the source country and positive benefits for the host country have both been exaggerated.
The WTO's argument is built on an effort to examine that the principal data sources are private, with official information being primarily restricted to that which can be gleaned from input-output tables and balance of payments statistics.
Second, there are significant discrepancies in the evidence available from different sources, whether they be private or public. And, third, in some cases as in India, even official information as available in the balance of payments statistics is collected and collated by a private body — in this case the National Association of Software and Services Companies (Nasscom).

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Offshore Software development is a powerful way to deliver quality software solutions rapidly and with high flexibility, while at the same time making minimal demands on your internal IT resources.
The impact of outsourcing on your software development process includes:
Rapid implementation—no special software or hardware required
Minimal up-front investment and lower total cost of ownership
Faster speed to results
On-demand service with pay-as-you-go pricing
Expert software developers, technical support, and marketing specialists are only a phone call away
No internal resources needed to implement, maintain, and support
24x7 hours customer service

For the best offshore outsourcing services, offshore software development and software development outsourcing, contact A-1 technology, Inc, an offshore outsourcing company.

From: mackinac

Outsourcing itself is nothing new. U.S. companies and governments have been outsourcing domestically for decades by contracting out such services as payroll, database management, and janitorial services. The new twist has been the recent increase in foreign outsourcing, or offshoring, in which companies buy services from foreign-based providers. Foreign outsourcing has been made increasingly cost-effective because of the personal computer, which has digitized much of our work, and high-speed and deregulated transmission of that information through broadband and the Internet. Informational technology (IT) companies are increasingly outsourcing routine programming, data entry, and system monitoring. Call centers are shifting more of those thankless jobs abroad.
Foreign outsourcing almost certainly benefits the U.S. economy in the short run as well as the long run. Like more conventional forms of trade, foreign outsourcing allows U.S. companies to dramatically cut the cost of certain information technology services. As a result, U.S. companies become more competitive in what they do best, their “core competencies.” Better and more affordable services become available for consumers and taxpayers. Outsourcing allows companies to operate on an around-the-clock, “24/7” production cycle, further adding to productivity. Outsourcing is even making possible work that simply wouldn’t exist otherwise, such as chasing down delinquent accounts receivable that were thought to be beyond collection.

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From: mackinac

Outsourcing, like trade in general, is reshaping the world in favorable ways beyond our borders. In a classic win-win from trade, outsourcing invigorates the U.S. economy at the same time it builds a pro-American middle class in India and other developing countries. The Indian high-tech sector is flourishing because that nation has ad-opted the U.S. model of zero tariffs on imported software and hardware, no restrictions on foreign investment, and an emphasis on post-secondary education.
While most of the jobs outsourced from the United States are on the lower end of the pay and status scales in the United States, they are among the best jobs avail-able in Indian and other developing countries. In such cities as Bangalore, Calcutta, and New Delhi, hundreds of thousands of young Indian college graduates, men and women alike, are realizing the fruits of middle-class life that we take for granted. Although the $6,000 paid to an Indian programmer sounds ridiculously low in American terms, it can buy about five times as much in India because of lower domestic prices, enabling Indian programmers to rent their own apartments, own cell phones, make car payments, and travel abroad.
As the United States seeks to win friends and influence events in South Asia and elsewhere, it would be hard to find a more naturally pro-American enclave than the Indian high-tech sector. It would be terribly short sighted to disrupt our growing, mutually beneficial trade and security relationship with the world’s most populous democracy to save a relatively small number of jobs that are not among the more well-paying in the Untied States.

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