Outsourcing

I’m sitting in my car sending an E-Mail to a potential client in France. Just as I press the ‘send’ button on my iphone, I see something, a big red post box. The sight makes me smile. I can’t remember the last time I used one. As I pass by it, I can’t help but wonder what it was like before, before E-Mail, Internet or modern transport.

Imagine the merchants of days gone by. The delivery of cargo, back then, was an enterprise in itself. The merchant would hire two or three caravans. One would hold the cargo, the other would be for the guards, and the third would carry the provisions required by the entire party. They would battle the elements on the way to their destination. Halfway there, they would be attacked by bandits. They would choose between fight and flight. Depending on the outcome of the skirmish, either a tired and smaller party would arrive to finish the delivery or the cargo would be lost forever.

Today all you need to do is call FedEx. Technology has come so far. There are so many wonders, science has provided. It is thanks, to this technological progress, that we live in a truly global economy. There are so many tools available to the modern business man, yet there are so many who will still insist on using papyrus rolls to send a message. Okay, so maybe that’s an exaggeration, but it is a fact that a large number of businessmen/women are still blithely unaware of the advancements in technology.

It is very important that entrepreneurs take the time to research the technologies that are relevant to their business activity. There is so much that technology can do that it is important to make sure we are putting it to the best use.

There are times when an organization cannot handle its increasing work load. There are a number of ways to handle this situation. You can increase your work force, merge with a larger organization or you can share the workload. Increasing the work force can be a very tedious job. It would involve increasing office space and day to day resources as well. Every merger comes with strings and not everyone likes to be tied down. They say, ‘sharing is caring.’ So let’s look at two ways that enable organizations to share the workload. ‘Outsourcing’ and ‘off shoring’, though the concepts have been around since the 1980’s, it was only after the 2004 U.S Elections that ‘Outsourcing’ and ‘Off shoring’ became terms of everyday usage.

Technically the terms have very different meanings but they are used interchangeably. Outsourcing is subcontracting a process to a third-party company, whereas Off Shoring is subcontracting a process to a third-party company, outside the country. The advantage of doing this is that companies can save on costs. The main contribution to cost effectiveness is the gap in the wages of developed and developing countries. The world today has become a global economy. We are all so interconnected, that the growth in any one economy will have a positive effect on every other economy in the world. On the other hand, the fall of an economy can have disastrous global consequences. Case and point: the current recession.

Call it ‘outsourcing’, ‘off shoring’, ‘near shoring’ or anything else; the fact remains that sharing resources, responsibilities and liabilities, is in everyone’s best interest. The sheer volume of work load being outsourced, is an indicator of the effectiveness of ‘outsourcing’. Be it in business, or in personal relationships, we all function on one basic agreement. ‘You do your part and ill do mine.’