Outsourcing in Asia

  • March 7, 2011
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Asia is now considered to be the high-growth location for call center activities for years to come by most accounts, enterprises still does offshore operations in India and the Philippines and then draw to China to attend to the local market.

A recent report says that the number of call centers to be establised in the Asia-Pacific region will increase at a combined annual growth rate of 14.3 percent, surmounting 17,000 by 2008. The said report assumes call center dynamics in the region will still be influenced by labor costs in India and the Philippines and rapidly in Malaysia and China. While China does not possess a massive number of English proficient speakers, that will change by 2008, the report believes.

The top reasons for a company to site call center operations in Asia are to: stretch out operations; lower costs; follow customers; compete in the global marketplace; and apprehend around-the-clock business support.

China is getting more attention these times as a result of the nation being awashed with infrastructure advancements and construction in preparation for the upcoming 2008 Olympics.

China has an unbelivably large and increasing number of middle class men and the service market is getting more competitive. In the following 10 to 15 years, more than about 50 percent of U.S. inhabitants will be over 55. In India, more than 500 million today are under 25, so if it is to be based on demographics, it will be considered as the start of a major change in global economies. China is now where India began nine years ago. People are considerably learning English in China now than there in the U.S.

India and the Philippines are said to be good candidates for back office/front office supporting call center operations out of the U.S. China is considered to be much more of multinational country.

Among the other choices in the region includes Australia, which has about 146,000 call center seats.

Australia is one of the best options for firms looking forward to serve North America. Moreover, more than 100 different languages are spoken in the country, offering much more flexibility.

Malaysia has said to have the same labor-costs to China. It can provide service to China as well as having English-speaking populations and also a high literacy rate.

Offshoring is now getting much more recognition to companies in debt and some that is in need to lower their cost structures, technology making this viable.

The phenomenon called globalization is indeed beginning to be recognized. With expected greater bandwidth and the lowering of its costs, the capacity to send information and voice calls to areas that were unreachable 10 years ago is now attainable.

A call to Asia now costs nothing.
Strictly Outsourcing
What is outsourcing?
A quick little surf on the Internet sets up a variety of definitions:
“acquiring a product or service rather than producing it yours”
“the contracting out of a company’s non core, non revenue-producing activities to specialists”

“transfer or delegation to an external service provider the operation and day-to-day management of a business process”.
Outsourcing, if based in literal means, is sourcing from outside. The term is used increasingly to identify the sub-contracting of a set of functions or processes by one enterprise to another, or to a group of people. The latter organization is frequently in another physical location, or another country altogether.

Outsourcing is being chased as a very good business strategy in the current economic bandwagon, since it allows a firm to concentrate more on core-competency areas. It also unrestrains the firm from resource and labour intensive operations, which are now worked by well-trained personnel at unsurprisingly lower costs.

These processes or functions that are being outsourced may range from customer service and telemarketing, to IT management, software development, market research and maybe even financial portfolio management.

Why outsource?
The following are some of the key considerations on why to outsource;

* Lower costs due to economies of scale
* The capability to focus on core operations
* More flexibility and capacity to identify the required service more quickly
* Particular supplier benefits. Examples of these are better security, continuity, etc.
* Higher quality service due to concentration of the supplier
* Better internal management disciplines because of the exercise itself
* Less dependency among internal resources
* Control of budget
* Faster set up of the function or service
* Lower continous investment required in internal infrastructure
* Greater ability to deal with delivery dates (e.g.: via penalty clauses)
* Inadequate internal expertise

Almost all of the outsourcing companies base their main operations in the USA, while some in the Australia and others still in Europe notably UK, while most of the outsourced workforce is done in Asian countries such as India and the Philippines. Protests have been made against outsourcing in countries such as the USA, and just recently in Australia, as some of the professionals are in danger of being dislocated. It is said that when certain operations are shifted, jobs are usually shifted too. Regardless of this, this kind of dislocation is commonly impermanent and there are very few talented and skillful professionals who are definitely losing jobs due to outsourcing.

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