Advantages of Outsourcing from Europe to Europe (over Asia)
by: Guest
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Word Count: 521
What are we talking about anyway?
Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Recently the term is being used for delegation to countries where salaries are very low in order to cut the costs. Still, most of the outsourcing that occurs today still occurs within the country boundaries. Why? Delegation to eastern countries can bring several obstacles. Finding a reliable and suitable partner is a hard task. In order to benefit from outsourcing without a huge risk you need reliable partner, company or individuals. Selection process is hard due to cultural differences such as completely different education and people's skill set. Salaries are low in undeveloped countries where the market is undeveloped and the definition of an expert is different. Last but not least, despite the new age communication technology people still must have live meetings in certain situations which may be very expensive and takes time to organize. Buying services is necessarily considered outsourcing. Outsourcing always involves a considerable degree of co-ordination and information exchange.
Because of a high risk of organizational problems, co-ordination and communicational obstacles (time zone difference brings many), lack of business understanding in eastern contries, cultural differences, physical distance, not enough trusted and reliable partners etc. many companies will not take the risk to outsource outside the country despite the big market pressure to do more for less.
But some companies do take the risk because of the high potential. They mostly outsource the least connected to bussiness parts of the product cycle chain such as development. For small companies offshore development by freelances can cut costs but is not easy to manage and has many risks.
What are the options?
The options are many. In order to cut costs one of the exciting options is to outsource somwhere where the working labour is cheap. The problem is that IT professionals are not exactly a working labour it is an intellectual job for most of the time and there is no replacament for quality experts. By quality experts I mean not only good education and IT skills. By looking at the researches of failed IT projects it is very clear that the reasons they failed are not IT related. The top studies confirm that and that should make you think. Organizational problems are more tough to manage. If you want to get into the business this is where I advice you to be better then the rest. I advice you to mitigate the risk, pick people which don't have so much differences then you. Far east might be too far, you cannot travel there often to make a meeting, the cultural differences are huge. The time-zone problems make it hard to make even a virtual online meeting. Probably the most important thing is to make your partner understand the business goals of your project, if the cultural difference is too big it's hard to achieve it. The Eastern Europe countries just might be a better place to look for. Try it! Most western people don't realize the potential of Eastern Europe IT experts.
About the Author
Milan Kosanovic is an IT professional. He has worked as a senior developer, Microsoft Certified Trainer (for databases, application development and systems administration), he is a published author in several countries (he is a co-author of several books, and publishes regularily in business computing magazines). He has gained many milestones such as: MCDBA, MCAD.NET, MSF, MCSA and has lived and worked over several countries with different cultural heritage. He runs his website http://www.softlakecity.com
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