An overview of the off shoring concept

Abed A.

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An overview of the off shoring concept

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Abstract

Mindcrest, a Chicago based legal firm, had younger associates who wanted to do more challenging work rather than doing simple legal work related to research and routine legal affairs like filling of qualified domestic orders. And also clients were not ready to shed $ 200 for such simple work. So they found out an alternative i.e., by sending their work overseas. The company had employed six lawyers and nine staff workers in Mumbai to work on these routine legal matters. By doing this, they saw that the costs reduced tremendously making it profitable for the firm. This whole process where a company opens its base in another location which could prove to be beneficial for the company in a wide number of ways is termed as off shoring. In one way we can term off shoring as internationalization of services .The present case is only for a legal firm .But there are many companies which are into this off shoring business. Each firm has its own reason to set up its branch in another location. One would be because of cheap labor, another for more proximity to material and the list goes on. (Ellen. l.Rosen, New York Times, March 14 2004).

Introduction
Evolution in corporate America
Major players in offshoring
Statistics of the financial aspects and the growth rate of offfshoring in the US
Impact of offshoring accounted for 3 major groups
1. Individuals
2. Businesses
3. Nations
Factors critical for success of offshoring
Issues involved in offshoring
Costs and values
The unique challenges
The critical one
Major players in offshoring
References

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[...] Like this each company has started reducing their employees in the main center and started to open their offices in other places.”(LOUIS UCHITELLE, October 2003) IMPACT OF OFFSHORING ON BUSINESSES: Off shoring has a tremendous impact on the businesses as it saves a significant amount of money for the company by moving to a location where the labor is cheap, as In the case of General Motors which shifted its base to Mexico to Manufacture Pontiac Azteks. Another type is producing components of a product at different places and then making the final at another location as is done in the computer industry. [...]

[...] (December, 2001) As an IS manager what recommendations will you make to the CIO of your organization to overcome this challenge? Initially data needs to be segregated according to the importance and preferences i.e., some data may be needed by the employees and some only by the top management. So the information required by the top management is not required for the employees. So they must not be given access to such information. It's also recommended that the security policies follow a data life cycle process. [...]

[...] The processes in an organization need to be clearly described to prevent any kind of ambiguity among the various processes. This can remove the redundancy of the work and also make the work done by the processes also very efficient. PAYING ATTENTION TO CULTURE As the company starts operating in a new environment where the cultures are different, it should not hurt the interests of the people there. AIMING FOR SEAMLESS OPERATIONS Even as the operations are carried out on a global scale, the operations need to be synchronized and properly managed. [...]

[...] So it should be seen that all the data needs to be managed in a proper way Off shoring a company to another location is not a big problem in itself. But availability of resources, labor is important to manage the data. There should be enough people to be recruited for a particular job. They should have the minimum skills needed to manage the data. If inexperienced people start managing the data, there could be a loss of valuable information of the company .To select the best of the students from this pool is a challenging task. [...]

[...] financial service providers (FSPs) are expected to spend $ 65.7 million on IT services in 2005, however less than 30 percent of FSPs will outsource any strategic projects by the end of 2006."(Statistics Related to Offshore Outsourcing, August 2007) And the growth measured is US IT off shoring market will record a compounded annual growth rate of and will nearly double to $ 14.7 billion by 2009”.( Statistics Related to Offshore Outsourcing, August 2,2007). Looking at the trends shown above it is understood that off shoring is a key to the economic prospects of the country both in monetary terms and also in terms of employment. [...]

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