Globalization | Zylun Outsourcing

Posts Tagged ‘globalization’

The Pros and Cons of Outsourcing

Posted on: February 17th, 2011 by admin 1 Comment

Many companies who might be interested in outsourcing often wonder about both the pros and the cons of outsourcing and whether or not it will benefit their company. By gaining insight about both the good and the bad of outsourcing, organizations can decide if outsourcing is right for them. Here are lists of both, and you just might be surprised!
Advantages of Outsourcing
• Offshore outsourcing can help you save on time, effort, manpower, operating costs and also training costs
• Outsourcing non-core activities will give companies more time to focus on core business process
• Through outsourcing, it gives you access to professional, expert and high-quality services
• With outsourcing your organization can experience increased efficiency and productivity in non-core business processes
• Global outsourcing provides additional employment opportunities in developing countries like the Philippines, India, China, Mexico, ect.
• By outsourcing, you can cater to the new and challenging demands of your customers
• Outsourcing can make your organization more flexible to change
• Outsourcing can help your organization to cut its operational costs up to 50-80%
• In order to beat competition, any third party service provider will be a dedicated expert at the service that it provides
• You can experience an increased control of your business with outsourcing
• Deadlines are more easily met due to a significantly larger labor pool
• The costs associated with an outsourced provider are always lower then the costs required by an in-house employee
• Outsourcing can give your business a competitive advantage as you will be able to increase productivity in all areas of your business
Disadvantages of Outsourcing
• Time zone differences may pose a challenge with outsourcing
• Depending on the country, a linguistic barrier may be a challenge
• With outsourcing, your organization might suffer a lack of customer focus
• Contracts may pose a challenge as they must be renewed and understood
• With outsourcing, there is a need to have an in-house employee managing the offshore procedures

If you are looking to save money, stay ahead of the competition, implement the latest technologies, and concentrate on core competencies, then outsourcing will be a great option for you.

“Outsourcing and globalization of manufacturing allows companies to reduce costs,

benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation” –Larry Elder

In outsourcing, the pros far outweigh the cons. With these many advantages, outsourcing may be the key to taking your business to the next level. Contact us today and experience the many benefits!

Image Source: Ambro

The Economics of Outsourcing

Posted on: February 11th, 2011 by admin 4 Comments

The Economics of Outsourcing

“You could say—and I would—that globalization, driven not by human goodness but by the profit motive, has done far more good for far more people than all the foreign aid and soft loans ever provided by well-intentioned governments and international agencies. But in saying this, I know from experience that I have guaranteed myself a barrage of hate mail.”

-Paul Krugman

Global outsourcing has become popular among companies such as Procter & Gamble, Microsoft, ATT Wireless, Marriott, GE Capital, and IBM, just to mention a few. The main reason firms outsource overseas is because of the opportunity to hire skilled workers for a lower price than in the United States. While companies benefit from paying lower costs, is the rest of society made better off? Some basic economics serves to answer such questions.

The law of comparative advantage says that a group (such as an individual, firm, or country) has an advantage if it can produce a good (the meaning of “good” in this context can refer to an item or service) at a lower opportunity cost than another party (Note: “opportunity cost” refers not only to monetary costs, but also to the cost of output forgone and lost time). Specialization allows society to be more productive, which makes all countries involved richer. Countries such as the Philippines and India have a comparative advantage in offering outsourcing services because they are able to do so at a lower opportunity cost than countries such as the United States.

The standard of living is becoming higher in the United States as well as across the world because of international trade. Economist Charles Wheelan states in his book Naked Economics, “When different countries are better at producing different things, they can both consume more by specializing at what they do best and then trading. People in Seattle should not grow their own rice. Instead, they should build airplanes (Boeing), write software (Microsoft), and sell books (Amazon.com)—and leave the rice-growing to farmers in Thailand or Indonesia. Meanwhile, those farmers can enjoy the benefits of Microsoft Word even though they do not have the technology or skills to produce such software. Countries, like individuals, have different natural advantages. It does not make any more sense for Saudi Arabia to grow vegetables than it does for Michael Jordan to do his own auto repairs.”

As the offshore outsourcing industry grows, global economies will continue to expand. We need only refer to fundamental economic principles to understand the mechanics of the situation.

Image Source: Salvatore Vuono

Name:
Email Address:
Subject:
Phone number:
Company Website URL:
Additional Information:
Are You Human?
	info@zylun.com