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The Evolution of Outsourcing
After every recession, businesses find themselves grappling with a new adjusted business model. In the early 1990’s, multinationals began outsourcing work to low-cost offshore locations such as India & the Philippines. The majority of this work involved commodity type tasks such as customer support, telesales, and technical support. Most of these large companies setup offshore centers and realized a significant reduction in cost.
The next major change started to occur after the recession at the start of the millennium whereby a new breed of internet portals started to appear connecting freelancers in low wage countries with small & medium businesses in the developed world. This phase of outsourcing allowed SMB’s to take advantage of the same low wage scenarios that most multinationals had benefited from providing an extra level of competitiveness.
The current fall-out from this recession seems to indicate that a new phenomenon is starting to take hold. This can be referred to as “Home Sourcing,” wherein organizations are looking to reduce their fixed costs such as having to provide a desk in an office, computer, phone, and other office equipment by allowing local staff to telecommute or work completely on a freelance basis.
The metamorphosis of the current employment model is partly due to the fact that it is still very difficult to find reliable staff offshore who are trained to the same level as an individual from a developed nation. The savings in wage costs are often offset by having top expend a lot more time managing these resources. Several outsourcing companies have experienced such and saw evidence in the market that points to growth in telecommuting which is a scenario that benefits both employer and employee. Telecommuting allows a business to reduce its fixed staff costs but also allows the worker to enjoy a better work-life balance as the need to commute to work is no longer part of the deal. A typical telecommuter maybe required to go to the office once a week or once a month primarily for face to face meetings and discussions.
Outsourcing companies are new breeds of companies focused on providing tools to enable employers to better manage remote-based staff whether they be located in the U.S., U.K. or much further a field. The belief is that the momentum towards a more loosely coupled enterprise is inevitable as the tools to monitor and measure staff productivity improve thereby allaying the typical fears of trust.
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