Misconceptions About Information Technology Outsourcing - By: Mohsin Khan

Misconceptions prevail in each sector from business to manufacturing, and the industry of IT outsourcing is no exclusion naturally. While these misconceptions haven’t been able to halt the flow of subcontracting, they have done some damage to small businesses that desired to gain from the numerous benefits of subcontracting information technology tasks. In this article, we will see some common myths and will examine why they are misconceptions merely.

First of all, people think outsourcing is doing damage to the local economic system. While I am not articulating that jobs aren’t affected by overseas outsourcing, the hype that the practice of subcontracting is bad for the economy is a myth surely. If subcontracting your IT jobs allows you to cut costs and enjoy more profits, doesn’t that mean more profit for the stockholders. Then, majority of the technology from fiber optic cables to internet telephony are manufactured by western nations. So it’s quite obvious that if IT outsourcing reduces jobs in one sector, it also brings in earnings to other sectors.

Furthermore, some companies have the misconception that subcontracting to overseas staff is a dishonorable act. This is probably the influence of propaganda by people who are against subcontracting for their individual reasons. Nonetheless, numerous big multinational companies outsource IT projects, not only to cut expenses but also to focalize on their core competencies. Commercial Enterprises exist mainly to make profits, contract costs, and grow bigger. By subcontracting, western companies benefit from the talent of an offshore population, which isn’t very much different than employing Indians living within our own country.

Some believe that outsourcing can lead to high expenditures after you count all the intangible costs linked with it. A concise comparison of wages in Asia and USA is sufficient to show that expenses do get reduced. In addition, keeping a bigger in-house workforce means you acquire all the office supplies from chairs to PCs for all of them. This greatly diminishes risks for small companies, and permits them to launch with very low capital. So outsourcing is not just for bigger businesses and can significantly benefit smaller firms that want to to launch with minimal investment.

Finally, a couple misconceptions come up because of bad managing by those who go for outsourcing. Entrepreneurs in western nations typically don’t take the necessary measures to avoid outsourcing failures because they lack experience about all this. For example, people think offshore service providers seldom deliver on time. This has actually more to do with appropriate selection than offshore subcontracting. There are lots of workers in the USA who are always late.

Furthermore, several people face communication problems while working with offshore workers. Above all, hiring dedicated staff who don’t work simultaneously for other clients can solve a multitude of problems that we mostly come across.

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