Offshoring, Outsourcing: 3 reasons why it's good for you

It's every businessman's goal to maximize profit using minimal cost. The first question starting entrepreneurs ask is "What do I get out of this?" In the ancient art of alchemy it has been said that in order to gain something you must offer something of equal value. However, when it comes to offshoring and outsourcing, you actually manage to get a whole lot while giving so little. Companies save millions of production cost by offshoring and outsourcing. This is particularly evident with the prominence of call centers in various countries like the Philippines, India, Australia and China.

Price goes down = Demand goes up

It's basic knowledge that the relationship between price and demand is almost completely inversely proportional. If all other things are taken to be in equal value then we can safely assume that as price decreases, the quantity demanded increases. Now where does offshoring and outsourcing come in? Let us remember the relationship between cost of production and price of commodity. If it takes less money for you to produce then it is possible to lower the price. If you outsource certain business functions, you cut down cost. You do the math from here.

Odd Jobs out, Great Jobs in

Along with the progress offshoring and outsourcing give, it won't exactly be a business venture without worry and risk now would it? What people worry about is that employees of these client companies will lose their jobs to relatively cheaper alternatives to labor cost. That is one way of looking at it. That's the easy way of looking at it. However, if you'd also look at another side of it, if a company moves call center jobs offshore, the way would be paved for more sophisticated jobs; jobs that require greater skill and qualifications. This in turn moves the education system and trains people to be more competent to qualify for higher-paying, more fulfilling jobs.

Business will focus on what really matters

Most of the jobs being outsourced by client companies are customer service jobs or tech support jobs. These business functions though still needed is at the bottom of the food chain and once you offshore this business function, you will have time to focus more on the things that do matter. Invest more time, money and effort on research or marketing.

In offshoring and outsourcing, good things keep coming. Outsourcing jobs to foreign countries may be one of the best ideas to come out. Call centers top the list. Inbound or outbound, these are jobs that developing countries strive for and the developed countries can easily dispense. It’s a win-win situation for both parties.