What Businesses Can Expect From Offshore Outsourcing

Today, it makes great business sense to outsource product development

. The reason behind this is that keeping an in-house staff to do secondary functions is unproductive and more expensive to maintain, and a lot of companies are realizing it. There are those who criticize this practice saying that it can devastate the economy of the country they are in by taking out job opportunities. Despite what the critics say, however, outsourcing is still big in the US for small businesses and large companies alike.

There are firms in the US that are accepting outsourcing jobs from large corporations. They do this in answer to the criticism of not creating local jobs for US citizens. Although this is a viable option for large corporations, some still go for offshore outsourcing because it is able to provide same quality of product with less the cost.

The main benefit of outsourcing in a global scale is that the main company would have the freedom to focus on the core activities of the business. They are now able to create skilled positions in order to improve strategic plans. Due to the increase of efficiency in the production level, they can now afford to decrease prices. This is in turn linked to the creation of more loyal customers and greater economic growth.

Meanwhile, the effects of offshore outsourcing are not all positive. Offshore product development outsourcing will cause permanent job lost for the nation. A lot of workers are now required to gain new skills just to find new jobs. The standard wage for the entire country will be reduced because of the competitive rate of overseas workers.

There are a number of large corporations who are having second thoughts on product development sourcing for it may result to decreased quality control and lower quality workmanship. Poor quality products are liable for lawsuits especially in developed countries such as the United States of America. Aside from the social and financial effect of a lawsuit, product recall in the market can follow suit.

Another disadvantage of offshore product development outsourcing is the language barrier. Miscommunications will happen if both the mother company and the outsourcing agent cannot understand each other due to difference in language. However, IT geniuses are on their way to developing a technology that will make global communication possible.

by: Maria Tal

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