2006-07-31 23:08:09 · 14 answers · asked by SHEKHAR_CHHAJER 1 in Computers & Internet ➔ Other - Computers
No. Outsourcing is not helping in cost reduction, but it provides a well managed and expert support to the consumers. It is more important to maintain a good customer relation. This not only retains old customers, but also alure new ones.
The cost reduction has resulted due to competition and entry of countries with cheap labour into the production chain. Countries like china provide hot spots for factories.
We should not confuse between de-centralization and outsourcing. This is what most of the people confuse.
When a process or a part of the process is been done by another company, not in collaboration, it is called outsourcing.
On the other hand, a company, like IBM, might set-up his office and plants in different states or different countries. That is not outsourcing, it is de-centralization.
The basic funda is that, if labour is cheap in China, set up ur factory there. If brains are cheaper in India, set up your management there. Finally, you will get the best product, with the cheapest price.
Outsourcing actually results in an increase in cost of living, in the location where the process has been outsourced, due to an increased money circulation.
2006-07-31 23:45:42 · answer #1 · answered by Chandrachurh 2 · 0⤊ 0⤋
Cost reduction is of course one aspect, and a major one at that, but does not account for the sole reason for outsourcing. By outsourcing, companies are free to focus on their core competencies. (At least that's one of the theories). It all depends on what a firm outsources. There are many resources on the web to answer your question,. A great book "The World is Flat" by Friedman of the NY Times would put this in perspective for you. It's an interesting read.
2006-07-31 23:16:25 · answer #2 · answered by Avery G 2 · 0⤊ 0⤋
Yes! Usually big companies, say in the USA, seek countries that have cheap labor... like the Philippines, India, China and so on... (I agree!) This is an opportunity for big companies to reduce costs and make more money, and still get quality service for a lesser cost! These companies will be helping (a LOT!) these so called third world countries (host for outsourcing) with employment and economy, but they are undermining employment and local economy (so with the national economy) the country from where they are.
P.S.
The quality of service is based on what kind of company you hire for out sourcing... So if you hired a fly-by-night company you get the quality of service you deserve. (you get the picture...)
2006-07-31 23:15:19 · answer #3 · answered by Awesome 3 · 0⤊ 0⤋
Only for the profiteering stockholders and CEOs! One day soon tho it will cease, when the government has to spend most of its income to feed the 75 percent of the population who no longer has a job....farkin idiots....someone should have put a cap on profits a long time ago! Now sit back and wait for the idiot to come on here and tell us "our companies need this! Its to hard to make a profit without it!" Let me give you an example of profit here, I worked in a large and lucrative switch manufacturing company for 14 yrs. The switches on my line cost 25 cents a piece to manufacture from beginning to end, They sold for 50 dollars....whats wrong here? They outsourced a major portion of the company, I guess they werent makin enough?
2006-07-31 23:15:59 · answer #4 · answered by Anonymous · 0⤊ 0⤋
One hundred years ago they were complaining about outsourcing the building of certain transportation items, yet we survived the lose of the wagon building industry.
2006-07-31 23:17:33 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Yes, but it undermines the basic infrastructure of a country by taking work out of that country, although it may help boost the basic infrastructure of the employment/production host country.
2006-07-31 23:12:35 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Hugely! But still questionable as to whether quality of service is being maintained. At least not across the board.
2006-07-31 23:11:38 · answer #7 · answered by aap36rob 2 · 0⤊ 0⤋
Hmmmm, that's a good question. It's definitely helping in increasing the bottom line, which is all most stockholders and execs seem to be worried about.
2006-07-31 23:12:25 · answer #8 · answered by Anonymous · 0⤊ 0⤋
initially, yes, tho the loss of quality and increase in frustration for customers is killing the business in the long term...
...short term management bleeds companies dry and the only ones to win are the short term shareholders.
2006-07-31 23:13:22 · answer #9 · answered by jedi_reverend_daade_selei 3 · 0⤊ 0⤋
Yes, you can compare prices and can pick the best available in the market.
2006-07-31 23:12:28 · answer #10 · answered by shanghai68 4 · 0⤊ 0⤋