Learn about what’s happening within the industry of knowledge process outsourcing or the broad industry of outsourcing in general. Our writers are doing tedious research on various sources to deliver the freshest information for you. We’re keeping you informed about the trends, pulse, and the condition of the outsourcing industry.

IT Outsourcing Survives Economic Slowdown

The IT outsourcing industry remains healthy amid the economic slowdown being experienced globally. Although business sectors have eventually decided to lower their employment cost through mass lay off and shut down, the industry of outsourcing industry particularly, Information Technology (IT), survived and is fully recovering. Data from the National Outsourcing Associations (NOA) suggests that outsourcing companies have a wider range of acceptance today than a few years ago. More and more businesses have decided to outsource their IT tasks, which, then, dramatically cut operating costs.

Meanwhile, the effects of lowering expenditures related to performing IT tasks gained an affirmative approval from the business sector. Aside from lessening the payroll, companies were also able to save capital in the outsourcing process. Outsourcing helps minimize and eliminate the need to purchase systems and machineries that easily become outdated. This increase in demand challenges the outsourcing industry to improve as a business model to be competent in meeting the challenges of this ever growing industry.

Despite issues surrounding the boom in the IT outsourcing industry, its growth and continued expansion have never been hampered throughout the years.

Source: http://www.sourcingmag.com

Benefits of Outsourcing for Small and Medium Scale Businesses

Large companies, nowadays, resort to outsourcing their non-core tasks to be able to focus on the improvement and maintenance of their core competencies. As advancements in technologies gain a wide support from the business sector, they require valuable services for technical resources, software support, and infrastructure maintenance.

With the growing accessibility to technology today, small businesses are feeling the need to take advantage of the different strategic and marketing tools to survive in the recession. Apparently, outsourcing is not only for the big and multinational companies. It is also for small and medium scale businesses (SMBs). It offers great benefits to every SMB, which can consequently lead to continuous growth in the industry.

Competitive Edge

In the industry where tight competition is evident, you need to gain that competitive edge against other SMBs. By outsourcing your tasks, cost is not only minimized, but you also get optimal results from your money. You can now offer better services without spending more on labor and overhead costs. Outsourcing can give you that touch of sophisticated technology without acquiring expensive and high maintenance machineries. The cost of hiring more staff during peak seasons is also eliminated by outsourcing minor activities, while leaving other tasks to your in-house manpower.

Cuts Down Cost

Outsourcing can help small businesses to significantly reduce their overhead cost, while improving the quality of their services. SMBs can now get the most sophisticated workflow technologies without having to shed too much capital on investments. Take into consideration the outsourcing of your IT processes. IT outsourcing companies have a pool of workers trained in such fields. Their highly skilled professionals will do the data processing and basic data entry. They will also provide technical and customer service support for you. These ensure that the quality of service rendered by outsourcing staff and received by outsourcing industry clients are of high quality. Simply put, outsourcing is getting the job done by experts at a lesser cost!

Concentration on Key Competencies

Aside from minimizing costs incurred by SMBs, outsourcing might be necessary when the company feels the need to concentrate its attention on its core processes. Compared to the cost associated with having in-house employees, the cost of outsourcing might seem expensive. The truth is it really cuts down the cost by providing SMBs their well-needed technical and software support systems. Also, the tasks are performed by IT professionals and experts, so SMBs are assured that they get the best output from the outsourcing companies. When some tasks are outsourced, in-house workers have enough time to focus and to do the critical tasks of planning the marketing strategies of the business. One or two tasks being outsourced can increase the productivity and quality of output in an area upon which you want to focus. With enough time on hand, SMBs can now look for better ways to do business; thus, adding value and quality on their products and services.

Laguna and Cavite Top Next Wave Cities Ranking

To encourage more outsourcing companies to invest in the country, the Commission on Information and Communications Technology (CICT) is targeting to build an outsourcing hub in every province. The said move is in accordance with a directive issued by President Gloria Macapagal- Arroyo to invite outsourcing companies to situate their place of operation in every province throughout the country.

In an interview made by INQUIRER.net, CICT Commissioner Monchito Ibrahim said that they will start to make every province a part of the next wave cities program. This is associated with the government’s earlier efforts to build and develop prospective areas in many cities and provinces that will house different outsourcing firms. The local government will play a vital role in this attempt since CICT will encourage the local government to take the initiative in starting these outsourcing hubs in their areas. “Local stakeholders will drive this initiative,” Ibrahim said.

Since the continuous popularity and business opportunity gained by “next wave cities,” outsourcing has subsequently stirred the curiosity and interest of other provinces and cities. Ibrahim further admitted that many provinces and cities now want to be included in this circle of elite cities.

Together with the Business Processing Association of the Philippines, CICT and the Department of Trade and Industry (DTI) have devised a scorecard ranking in determining potential next-wave cities in the country.

In a recent ratings made, 10 destinations are ranked among the top locations for outsourcing companies. Included in these areas are provinces located outside Metro Manila. The ranking is based on talent (50%); infrastructure (30%); business environment (15%); and cost of doing business (5%). Different provinces like Iloilo, Davao, Bacolod, Pampanga, Angeles/Clark/Mabalacat/Dau, Baliuag/Marilao/Meycauyan, Cagayan de Oro, Malolos/Calumpit, Lipa, Metro Cavite, and Metro Laguna were included in the list.

Laguna topped the list, which includes the areas of Sta. Rosa and Calamba, followed by Metro Cavite, which includes Bacoor, Imus, and Dasmariñas areas. Only Cavite and Laguna were given top scores in the “talent” criteria, while Davao scored highest in the “business environment” criteria.

Although the said provinces are considered to have the potential to attract outsourcing companies in establishing their companies in the area, 80% of the outsourcing companies are still currently based in Manila. “There is tremendous pressure on Metro Manila in terms of manpower supply," Bureau of Investments, Executive Director of Investment Promotions Celeste B. Ilagan said.

The president of the Laguna Industry Network for Knowledge, Innovation, and Technology, Tony del Carmen, said that the high ratings acquired by Laguna was due to the “high density of schools” in the area. He noted that Laguna houses around 32 colleges and universities and 250 technology-vocational schools to date. “This has been Laguna’s edge,” he said pertaining to the huge pool of talents that these educational institutions can generate. With the growth of qualified and skilled talents in the area, different outsourcing companies are planning to establish their sites in the province. Del Carmen added that they are planning to collaborate with different educational institutions in the area, particularly top universities, to help support and boost the outsourcing industry in Laguna.