What is outsourcing?

Outsourcing refers to the way in which companies entrust the processes of their business
functions to external vendors. Any business process that can be done from an offshore location
can be outsourced. This includes functions like transaction processing, payroll and order and
inventory management to name a few. Plus, there are a whole lot of call center services that
are being outsourced as well. Some of the processes that can be outsourced to providers like
Flatworld Solutions are accounting and book keeping service, business process outsourcing,
text and editing services, image manipulation services, OCR clean up services, transcription
services, data conversion services, call center services etc.

What is Global Outsourcing?

Outsourcing is an allocation of specific business processes to a specialist external service
provider. Most of the times an organization cannot handle all aspects of a business process
internally. Additionally some processes are temporary and the organization does not intend to
hire in-house professionals to perform the tasks.
Once the task is outsourced to the service provider, he will take the responsibility of carrying
out the tasks and maintaining the organizations assets.
However prior to outsourcing any component of your business to a third-party vendor, it is
essential to understand the advantages and disadvantages of outsourcing. Although
outsourcing presents a variety of benefits to your organization, it could also pose diffi culties if
not outsourced to the right service provider.
The most commonly outsourced streams of business include:

IT outsourcing

Legal outsourcing

Content Development

Web Design and Maintenance

Recruitment

Logistics

Manufacturing

Technical/Customer Support

Why do organizations outsource their business process?

The key factors which have led to a growing trend of outsourcing are

Lack of expert-labor in some portions of the business process

Availability of cheaper labor, whilst not comprising on the quality of output

Ability and feasibility to concentrate on the other crucial business process

These factors have specifically contributed to most of the outsourced partners across different
locations in the world. Expertise in communication capabilities, technical expertise and
favorable financial packages are the most important advantages of outsourcing to India.

Advantages and Disadvantages of Outsourcing

Outsourcing most commonly known as offshoring has pros and cons to it. Most of the time, the
advantages of outsourcing overshadow the disadvantages of outsourcing.

The Advantages of Outsourcing

Swiftness and Expertise: Most of the times tasks are outsourced to vendors who specialize
in their field. The outsourced vendors also have specific equipment and technical expertise, most of
the times better than the ones at the outsourcing organization. Effectively the tasks can be
completed faster and with better quality output

Concentrating on core process rather than the supporting ones: Outsourcing the
supporting processes gives the organization more time to strengthen their core business process

Risk-sharing: one of the most crucial factors determining the outcome of a campaign is riskanalysis. Outsourcing certain components of your business process helps the organization to shift
certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they
plan your risk-mitigating factors better

Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire
individuals in-house; hence recruitment and operational costs can be minimized to a great extent.
This is one of the prime advantages of offshore outsourcing

The Disadvantages of Outsourcing

Risk of exposing confidential data: When an organization outsources HR, Payroll and
Recruitment services, it involves a risk if exposing confidential company information to a third-party

Synchronizing the deliverables: In case you do not choose a right partner for outsourcing,
some of the common problem areas include stretched delivery time frames, sub-standard quality
output and inappropriate categorization of responsibilities. At times it is easier to regulate these
factors inside an organization rather than with an outsourced partner

Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden
costs involved in signing a contract while signing a contract across international boundaries may pose
a serious threat

Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of

multiple organizations at a time. In such situations vendors may lack complete focus on your
organizations tasks
With all these pros and cons of outsourcing to be considered before actually approaching a
service provider, it is always advisable to specifically determine the importance of the tasks
which are to be outsourced. It is always beneficial for an organization to consider the
advantages and disadvantages of offshoring before actually outsourcing it.
Take home the offshore advantage with Flatworld Solutions - your ideal outsourcing partner!

The Benefits of Outsourcing

Outsourcing is the latest buzzword these days, as more and more cost and quality conscious
businesses all over the world are turning to destinations like India for outsourcing their noncore business processes. So, what exactly is outsourcing and what are the benefits of having an
offshore partner do your work for you?
This article looks at the benefits of outsourcing and the value proposition offered by Flatworld
Solutions.

Benefits of outsourcing your business processes

There are many benefits of outsourcing your business processes to destinations around the
world. Some of them are:

1. Cost advantages
The most obvious and visible benefit relates to the cost savings that outsourcing brings about.
You can get your job done at a lower cost and at better quality as well. Due to the difference in
wages between western countries and Asia, the same kind of work that is done over there can
be done in India at a fraction of the cost. There is a cost savings of around 60% by outsourcing
your work to India. Plus, the quality of the services provided is high thereby ensuring that lowcost does not mean low-quality.

2. Increased efficiency
When you outsource your business needs to an outsourcing partner like Flatworld Solutions,
they bring years of experience in business practices and expertise in delivering complex
outsourcing projects. Thus, they can do the job better with their knowledge and understanding
of the domain. This leads to an increase in productivity and effi ciency in the process thereby
contributing to the bottom-line of your company.

3. Focus on core areas

Outsourcing your business processes would free your energies and enable you to focus on
building your brand, invest in research and development and move on to providing higher value
added services.

4. Save on infrastructure and technology

Outsourcing eliminates the need for investment in infrastructure as the outsourcing partner
takes the responsibility of the business processes and hence develops infrastructure for the
same.

5. Access to skilled resources

You no longer need to invest in recruiting and training expensive resources for your business.
Providers like Flatworld Solutions take care of the resourcing needs with their pool of highly
skilled resources. The resources employed by Flatworld Solutions are well educated in the
respective business areas and are experienced in handling the business needs of companies
that want to outsource. Further, Flatworld Solutions employs world class business practices
perfected over the years by catering to customers around the globe. Get access to the
expertise and capabilities of Flatworld Solutions.

6. Time zone advantage

Apart from the cost advantage, the other much touted benefit has to do with the time zone
differential between your country and the location you are outsourcing to. Get your job done
while you are closed for the day and wake up to your service being delivered the next morning.
This unique advantage gives you the benefit of round-the-clock business operations

7. Faster and better services

Make your service offerings better with high quality deliverables and decrease the lead time it
takes for your product to reach the marketplace. Thus you would be faster in getting your ideas
converted into products and better at delivering the value-added proposition.

Disadvantages of outsourcing
Outsourcing is the act of contracting your part of work for a lower price to another vendor. This is usually done to cut
on costs and improve revenues. Most companies outsource their work to third-world economies where labor is cheap
and resources are abundant. It is often done by the bigger companies by transferring their workload to free-lancers
and demanding a higher price for the project because of their developed image. However the word outsourcing can
have different meaning for different people. If an area lost jobs because the company outsourced its project to some
low-paid economy then these people will have a bad view for outsourcing. And the people who received jobs because
of this act will always consider outsourcing a positive term.
For a company outsourcing is a way risky step to take. In a way because there is always a possibility of losing
managerial control over the outsourced department or project. Despite of the signed contract the managerial actions
and decisions will still be performed by an outsider and it is a huge risk. The contract is always prepared by the other

company so you are at disadvantage here as well. Any additional work that may come up during the project and is not
mentioned in the contract will cost you additional charges. It will not be your own department who works for the
company but will be an outsourcing company who are interested in their money. Not only that, but the biggest issue is
business confidentiality. As you will have to give the private information to the new company or freelancer you have
hired. This information can be very secretive and may be misused by the other end. It gets difficult when you are
dealing with the other party for the first time. To be on the safe side it is advisable to include as much details in the
contract as you can in case anything goes wrong you have your securities written and signed. The worst part in
dealing with such companies is that they are not concerned with your corporate image; their only motivation is the
profit they will earn. For this very reason they will try their best to increase the profit as much as they can by cutting
down on expenses. This means they might hire cheap resources or use low quality material in manufacturing your
product or finishing your task.
Outsourcing may save a company some cash but the risk is far higher. It may result in complete loss of goodwill and
ruin the company image forever.

Concerns regarding ethics in outsourcing practices

Security Concerns: The core concern of outsourcing ethics is confidential information

security. Companies need to be concerned about the security systems in place and about the safety
of electronic data storage. If your outsourcing partner does not have adequate information about
security measures, it might be a good idea to stay clear of them

Fall in Service Quality: There is concern that services delivered from half-way across the
globe might not meet quality expectations. Companies looking to outsource should check the track
record of the vendor and their technical competencies

Environmental Issues: Companies are concerned that vendor companies may practice
environmentally damaging processes. They may need to conduct periodic audits to ensure
compliance

Poor Work Environment at Vendor Location: Companies have to impose stringent

standards on the work conditions at offshore locations. They need to conduct intermittent audits on
the work conditions and review the HR policies of offshore vendors

How Flatworld Solutions addresses ethics in outsourcing

Flatworld Solutions is a leading player in the outsourcing industry with over 5400 customers
spread across 45 countries. We are completely tuned in to our customers' concerns about ethics
in outsourcing.

Data privacy and Confidentiality Measures at Flatworld Solutions: We have firewall

protected networks, encrypted servers, VPN (Virtual Private Network) and password protected
systems. These ensure complete confidentiality of our customer's information. Our work spaces are
further protected by the use of swipe cards and cutting edge security devices

Clear Communication: Flatworld Solutions establishes clear lines of communication with the
customer. We are transparent about schedules on transition and pricing. Our privacy policies and
outsourcing ethics are clearly defined

Legal Measures: All legal aspects of the outsourcing relationship are covered in detailed
Service Level Agreements with customers. We enter into meticulous Non Disclosure Agreements with
employees and third party service providers to protect customer interests

Employee Selection Measures: At Flatworld Solutions we believe that a company's

reputation is only as good as the people they hire. We conduct thorough background checks on our
employees and follow tough selection processes to choose honest, ethical, and responsible
individuals, as part of our team
Outsource to Flatworld Solutions, a company committed to ethical outsourcing. We are
providers of world-class outsourced services to a global clientele.

What is Offshore Outsourcing?

Offshore outsourcing can be defined as the system of collaborating with an external
organization and assigning that organization to carry out some of your business roles. Usually
the product or the service which has been outsourced would not be sold in the offshoring
location; it would only be marketed in the outsourcer's country. Offshore outsourcing gives
organizations access to high-quality services at lower operating costs.

Categories in Offshore Outsourcing

There are basically three main categories in offshore outsourcing; business process outsourcing
(BPO), infrastructure and technology outsourcing and software outsourcing.
Organizations usually outsource parts of its process, which is important, but not vital for the
organization's stand. Processes like customer support, payroll processing are outsourced to
save on costs. BPO's can be further sub-divided. Back-offi ce outsourcing is outsourcing the
organizations internal roles, while front offi ce outsourcing is outsourcing the organization's call
center and customer support services. Call centers, help desks, financial services for the
organizations internal operations are all examples of offshore outsourcing.
Infrastructure and technology outsourcing services generally include services that support an
organization, such as, networking, technology services and support, etc. Offshore software
development services include software development services. India, China and Russia are the
three leaders offering software development services. India is one country which can handle
huge projects and deliver it in time.

Choosing Offshore Outsourcing

Based on the following factors, organizations usually choose whether to opt for offshore
outsourcing or not. Organizations generally choose offshore outsourcing when the project or
business process has functions that have to be regularly carried out. Other factors are if the
work in the project can be transferred over the internet and if the project is easy enough to
start up in the offshore country. Most organizations consider the cost factor, and choose
offshore outsourcing to cut huge costs.

India: The largest offshore outsourcing provider

The numero uno country providing offshore outsourcing services is India. India provides
services and support in almost all areas of operations. China and Russia come next in line,
followed by Philippines, Egypt, Bulgaria etc. Most of these countries offer software support
services, call center services, data entry services, programming services and many more
support services.

Flatworld Solutions: A leader in offshore outsourcing

Flatworld Solutions, a pioneer in outsourcing has been providing technology-driven offshore
outsourcing solutions to global companies since 2002. We have created value for our customers
in U.S, U.K and other parts of the world by providing quality and cost-effective services ahead
of schedule. Our customers have been able to give their business a competitive edge with the
benefits that we offer. Outsource to Flatworld Solutions and experience risk-free offshore
outsourcing.

Benefits of offshore outsourcing

Minimized operation costs and maximized revenue

Services delivered ahead of schedule

Access to specialized services which are not your core functions

More time to concentrate on core competencies

Save on investing in software, technology & infrastructure

Growth of Rural BPOs in India

BPOs and call centers are some of the first services that were outsourced to India. Outsourcing
BPO services met with initial hiccups, but today Outsourcing BPO services is a recognized
strategy for cutting costs and improving organizational effi ciency.
Ever since BPOs started to boom in India, they have provided employment to the mass
population aside from putting India on the global map in outsourcing. BPO services in metro
cities now seem to be focused more on high-end / knowledge based services while there's been
a silent shift happening to smaller Indian towns with the emergence of Rural BPOs. Outsourcing
trends are changing and rural outsourcing is seen as a cost effi cient alternative to running
outsourcing operations in bigger cities.

New BPO Trends: Why are BPOs moving to rural areas?

BPO trends are changing - outsourcing to India was once considered to be the norm as India
provided a low cost, English - speaking workforce. This is no longer an advantage as several
alternatives are available around the globe. Plus rising salaries also didn't help cost-sensitive
BPO operations. These, along with other reasons have prompted companies to look at rural
locations as an attractive alternative for outsourcing BPO services.
Rural outsourcing is cheaper and though the workforce gets similar perks as those in the cities,
the overall salary structure is much lower than in urban locations.

What benefits do Rural BPOs bring?

One of the biggest benefits that rural BPO services bring is employment to villages and small
towns. They also mitigate the risk of BPO jobs moving to alternate locations like Philippines,
South American countries etc., thus ensuring the growth of BPO in India. A huge chunk of the
local population also gets employment in a hi-tech sector that is otherwise not present in big
numbers in rural locations currently.

Are Rural BPOs really a lucrative business opportunity?

On the face of it, setting up a rural BPO operation looks lucrative and easy to set up, the truth
is far from it. The rural location should have a good system of infrastructure such as high-speed
internet, access to manpower and telecommunication systems. Also, it should be close to
bigger cities to enable easy movement of materials and clients.
Some salient features and challenges of Rural BPOs include:

Very Low Attrition

Compared to BPOs in urban areas, rural BPOs don't suffer attrition problems. In fact attrition is
almost not present in rural BPOs.

Employment and Reverse migration

One of the key aspects with rural BPOs is that it provides employment to villages and smaller
towns. Though it may not be as huge as that in the bigger cities, they source resources and

manpower locally. This has led to many youth going back to their villages after they had
migrated to bigger cities for job opportunities.

Infrastructure challenges
Though BPOs in rural areas suffer from obstacles like poor infrastructural facilities, lack of
internet connectivity and electricity, experts are of the opinion that they are highly sustainable
as they are cost effi cient. They are proving to be lucrative to both employers and the locals as
they have enabled a large rural population to earn and live with dignity. Further, the gap
between the metro cities and rural locations has also been reducing and has imbibed true
concepts of globalization into India's rural roots.
Rural BPOs have kindled the entrepreneurial spirit of many in India and are surely changing
outsourcing trends in India. However the growth is small but steady. Only time will tell if rural
BPOs can bring in bigger growth to thousands of smaller towns in India.

Will Outsourcing Continue to Grow in the Years to Come?

Outsourcing, which started in the early '90s as a revolutionary phenomenon of sending

unskilled work from developed countries to developing countries, has experienced tremendous
growth over the past ten years. Now, after more than a decade of outsourcing, the success of
outsourcing is being questioned. Will the advantages of outsourcing become overshadowed by
governmental pressures and rising offshore outsourcing costs? Will outsourcing continue to
grow or be curtailed by force in the years to come?
Industry experts, who have been studying the disadvantages and advantages of outsourcing,
feel that the future of outsourcing will continue to remain secure mainly due to the various
benefits that outsourcing brings both to the buyer and the offshore provider. The benefits of
outsourcing are manifold- the most important being cost-effectiveness and better
infrastructure, and this has lead to its sustained growth.
Careful assessment of the various offshore outsourcing trends have reveled that outsourcing to
India and other countries will continue to grow due to the following reasons.

Cost savings will continue to be a major advantage of outsourcing

One of the major benefits of outsourcing in the early years was the vast difference in cost.
Companies were able to reduce their overall expenditure considerably by paying less than half
the usual amount in salaries to their offshore outsourcing partners.
In the late 90's many outsourcing experts predicted that cost savings would no longer be one of
the main advantages of outsourcing due to the rising cost of living and technological advances.
But the financial woes brought on by the 2008-2009 economic crisis has made the whole
concept of cost saving even more important. With the economic recovery still unsure cost
saving remains one of the major reasons for outsourcing to India.

Outsourcing will focus more on core business activities

Latest trends in outsourcing point to the major change of focus from the outsourcing of noncore services to the outsourcing of core business functions. Most businesses, with a significant
number of SMEs, consider fully outsourcing their IT department, not only to save money, but
especially to gain better experienced and skilled specialists to produce high quality solutions.
Outsourcing to India, especially IT outsourcing, is on the rise due to the abundance of qualified
professionals who have the skills, resources, and methodologies it takes to create superior
results.

Standardized outsourcing solutions will be favored over customization

Another trend that will affect the future of outsourcing is the move towards standardization of
outsourcing solutions. The economic crisis of the recent years has led to companies favoring
standardized outsourcing solutions over custom made solutions which are more expensive.
Companies prefer to use their dollars saved to acquire new customers and to think out new
business concepts.
This has led to organizations outsourcing to India and other countries more willing to move to a
standardized way of working for non strategic processes. With the huge pressure to keep costs
down, service providers will also rely more heavily on mass automation tools that will create
additional opportunities and reduce the staff necessary to support critical business
applications.

Outsourcing of smaller projects will continue to be an important benefit of

outsourcing
The future of outsourcing will witness an increase in the outsourcing of smaller projects.
Although big corporate houses will continue to outsource huge projects to major service
providers, there will be an increase in smaller buyers who will be looking for flexible and
specialized smaller providers to support them in realizing new business concepts. This benefit
of outsourcing will be even more applicable to entrepreneurs and individuals who spent years
watching from the sidelines and who now want to benefit from a piece of the outsourcing
action.

Outsourcing of smaller projects will help companies, especially those looking towards
outsourcing as a way to resurrect their businesses as the economy rebounds. Outsourcing to
India will also continue to rise due to a surge in smaller IT service deals from first-time buyers.

Outsourcing and cloud sourcing will merge and grow exponentially

Industry experts who have been observing the benefits of outsourcing and cloud sourcing
predict that cloud sourcing will soon merge with the existing outsourcing market and provide
better opportunities for the entire outsourcing industry. With businesses in general pushing
towards cloud solutions for different reasons like flexibility, scalability and cost savings,
outsourced IT services will be required for migration of existing infrastructure and services to
make them cloud enabled.
This major advantage of outsourcing will benefit infrastructures supported by cloud resources
and other smaller outsourcing providers.
On the whole outsourcing is expected to increase dramatically in the years to come. This is
because globalization which inextricably links the world's economies leaves no room for
individualism. Companies will not be able to meet the various challenges they face relying
solely on their own internal resources but will have to look beyond for more cost-competitive
and capable sources. This is where outsourcing and the many advantages it brings with it plays
an extremely important role.