ResourcePad Blog

I’ve been reading up on a few forums, and have come across this question several times: why should I outsource? ResourcePad already has a set of articles written by no doubt, many professionals who have had experience in the field, negative or positive, but to sum it up: it saves you time and money. Of course, this isn’t always the case, but there’s a 70% chance that you’ll benefit. Before you decide to outsource, realizing just what you’re going to do is important, since there’s nothing more frustrating for vendors than a client who isn’t sure of his/her requirements.

AT Kearney sees the future of IT in outsourcing, and with politicians touting globalization the world over, it won’t be unsurprising. Especially taken into account the growing importance of social networking sites and virtual worlds — it makes managing projects with people in different countries that much simpler — something like an effective project management tool and alarm system all rolled up in one. With the introduction of Linked In, and other job networking sites, the chances of finding a reliable outsource provider is no longer the daunting task it was before. With websites like Elance, Guru, oDesk, etc., things are only going to get easier with time.

So if you’re asking why you should outsource, let me ask you why you shouldn’t?

According to Silicon.com, because outsourcing is experiencing a general slump in the US, Europe should be the key destination for those in the offshore outsourcing market. Indeed, to that extent, many vendors I know have begun to shift their focus to Australia, Germany and the like where until a few months ago, their key demo was the American market. Just goes to show how quickly things change in the IT business.

Another thing that’s worrying is the increasing reports of a global slowdown in outsourcing - TPI states that there’s been a 17% reduction in projects which is the largest decrease since 2001 in the first three quarters of the financial year. However, although the average contract value of outsourced projects in the US were down 38% to about $179 million, Europe showed an equal (35%) increase in their average totaling $277 million, which is approximated $100 million more than the US. While Europe only had a global (outsourcing) market share of about 37% last year, they’re now dominating with a 56% stake in the pie.

So if you’re a vendor, turn your eyes towards Europe and prepare to up your ante especially if you’re from South Asia competing with winners like Romania, Bulgaria, etc.

You can read the full article here.

AT Kearney, the independent research firm recently brought up a study conducted with 50 companies who outsource their business or IT processes offshore to get a better idea of what works for them. Needless to say, the study uncovered some interesting things including the fact that, to quote the report, ‘revenue performance improvement might be offshoring’s diamond in the rough’. Which means what, exactly? It means offshore outsourcing not only helps companies with their own workload and implementation of services they either don’t have the expertise to do themselves, or because of budgeting constraints; it also helps in profit margins. Outsourcing is actually pushing up revenues for corporations according to the study.

This may be the best news the offshore outsourcing industry has heard in months, especially with news of some companies stating that it’s over hyped and overused.

ResourcePad’s got it covered of course, under an excellent article written by new contributer Tom Kricheck. You can view it here.

Recently I came across a set of questions promoting cultural differences across the offshore platform, and though these issues are real and they do exist and they can cause quite a bit of problems for SMEs especially those who can’t waste important cash to start training programs; there’s a lot to be said for the basic rule: communication, and lots of it.

There have been a lot of new articles springing up on ResourcePad.com which I would advise you all to read, because not only are they informative and helpful, but they’re coming from people much like ourselves who’ve either started their own companies, have been working for other SMEs or who’ve been in the outsourcing development area for a couple of years.

We’re still working on our miniature Flash promo and hope to hear your comments on it once it’s been uploaded.

Cheers,

Alex

There’s been a lot of talk about Green Sourcing recently, and now it turns out, it’s all been a whitewash of sorts. Silicon.com has been reporting that green sourcing is considered a primary prerequisite for hiring outsourcing and off shore companies citing a report by Brown-Wilson. Most especially, data centers with their hordes of PCs sending poisonous vapors out there, have been a primary cause for concern.

However, more than one person from within the ‘go green’ camp has begun to join its naysayers. And though they have a point – after all, despite the solar powered electricity grid some companies are now sporting – the point remains: the more clients, the more resources, the more resources the more power consumed. So far it seems, no one has really been able to find an adequate workaround around the problem.

ZDNet’s reporting that companies seem to having withdrawal symptoms from using too much green and have begun to see the flaws with various firms trying to cash in. Looking back on it, a lot of it does seem to a marketing mess – especially since it’s become a consideration with larger companies when outsourcing to smaller ones – how much are you spending on the green stuff? The answer to it seems so significant, that one wrong step, could take you to the wrong side of town.

Some people seem to think that it might be over toppling the need for good service – after all, if Company A’s got the green sources so very important to the environment – they mayn’t be focusing as much attention on what counts, and going with the group might lead to corporate failure. Yours, that is.

But then, there’s the much talked about ‘global warming’ issue that seems to be spilling over into every conversation, IT related or not.

It seems however, despite Silicon.com’s very informative report, that software service providers are not high on the list of people who should go green. And if you think about it, that’s where the real problem lies, so to speak. I’m not an environmentalist or anything, but I do believe that shutting off PCs on a daily basis will be a reduction in…some capacity.

So what do you think of green sourcing? Do you think it will ever find as expansive a home as it seems to have found in the rest of the corporate world, where it’s almost a business?

(3 votes, average: 4.67 out of 5)

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Almost on all freelance/offshoring web portals, there are hundreds of providers and buyers have to sort through them and their bids. In order to make it easier for buyers to choose a provider, different portals provide different schemes to rank providers. So how should different providers be ranked? Following are some of the parameters:

1. Provider’s earning - the more the earning, the more successful a provider is. But does that mean he/she’d be good for a particular project?
2. Provider’s feedback from other buyers - the better the feedback the better the provider. However, usually feedbacks are played up. For example, a lot of people on elance.com get a 5/5, and Elance defines 5 as “exceeded expectations”. It’s hard to believe that so many people exceed expectations and the quality is still poor - either there is something wrong with the expectations or the rankings are hyped up!
3. Number of feedbacks in a given period of time - this is also not a real representative as a lot of providers deal with same buyers and ask them to give dummy feedbacks.
4. Certifications - some sites like rentacoder.com have certification tests, so different providers can take those tests and be a certified provider, however, a successful project takes more than simple certifications i.e., management, risk planning, communication etc.

These are some of the parameters used by various portals, but what about direct contacts. That usually depends on the charisma of the sales person. So how can we rank providers in an accurate, honest and fair way? I think I should invite some of our readers to comment on that.