Offshore Outsourcing

Justin Culpepper
Mitra Mohammadian
Moukthika Obulareddy
Nick McCollum
Nikki Lewis
Tara Mehryar
What is Outsourcing?
A practice in which an individual or company performs tasks,
provides services or manufacturers products for another
company functions that usually couldve been done in-house.
What is Offshoring?
The practice of basing some of a companys processes or
service overseas, so as to take advantage of lower costs.
General Statistics
Total # of jobs outsourced in 2015 2,382,000
# of jobs outsourced to China since 2001 3,200,000
Percent of CFOs surveyed whose firms are currently offshore outsourcing
38%
Favored India outsourcing 26%
Favored China outsourcing -18%
The Leaders
India, Indonesia and China are the top 3 countries with the highest workforce.
Tata Consultancy Services
The leading IT and BPO service provider in India.

Sources of TCS Revenue in percentages 2009-2010

Situation?
Offshore outsourcing is relatively new.
Begun as outsourcing of raw materials
Now utilizes human capital & resources

Huge increase in sending jobs to India and China.

Environmental Forces
Lack of certain resources/services
India leads in the IT industry.

Over 80% of the US and Europe outsource jobs to India.

Over half of the Fortune 500 companies outsource hardware/software.

Examples: Apple and Dell
Consensus
Americans generally have negative views. But why is that?
Typically this can be attributed to bad experiences, negative word of mouth,
misunderstandings or simply lack of knowledge.
However this isnt always the case. Media often portrays outsourcing and
offshoring negatively.
Influential Americans want to bring back American jobs.
Main Concerns
Questions we want to answer:
Can a company gain advantages besides profit by offshoring? If so, what
are they? If not, why not?
Does a company face ethical considerations in deciding whether to
offshore activities? Why or why not?
What might be the long term implications of offshoring, from the
perspective of the home country? The host country?
Pros & Cons
Pros:
Relatively low cost
24/7 service to customers
Large pool of skilled workers
Cons:
Loss of American Jobs
Loss Control over operations
Any confidential data may be at risk
Are you REALLY saving money?
All businesses are not expected to do all the jobs
Businesses that engage in outsourcing are allocating their resources the best
way possible
Tasks that are easy to train but require lots of man hours can be offshored
Makes room for higher skilled employees.
Low costs dont always mean cheaper.
Hidden costs arent always the same.
Is it always worth the trouble?
Recommendations/Suggestions
Outsourcing is definitely here to stay for very valid reasons.

Perhaps not outsource only manufacturing and customer service jobs:

Higher skilled & educated jobs could potentially be outsourced

The US as a nation should continue offshoring and/or outsourcing business.

Keep close tabs on the domestic situation to make sure the economy is
benefiting

Viable and necessary:

continue to remain a dominant force in the global economy.

Conclusion
No simple answer.

Somewhat yes somewhat no?

But one can draw a conclusion based on analysis, research and knowledge.

Assess the pros and cons of every situation-- to prevent money loss and
angry customers!

Offshoring and outsourcing are an important part of business.

Very integrated into business models-- will not go away anytime soon.