hSenid's blog on Outsourcing

For businesses in every scale, whether a large corporation, a medium-sized or a small business, outsourcing is recognized as an effective way to lighten a company’s workload and save its resources. The process must be executed correctly so that the buyer achieves its strategic objective and gains the greatest value through a healthy relationship with its supplier. The highest order issue for a buyer to consider is the binding nature of the relationship between parties. The parties to the arrangements must be able to conduct their business within a durable relationship of mutual dependence. This special type of commercial relationship is sometimes described as a highly structured joint venture. Naturally, a decision to venture with an external party is not one to be taken lightly. There are many issues for a buyer to consider and, because every buyer is different (and indeed every supplier is different), an outsourcing decision must be carefully planned, executed and controlled.

Offshore outsourcing has recently emerged as a topical innovation wave in this global industry. Generally, offshore outsourcing will involve entering either into an arrangement for work to be performed in another country at “offshore” rates; or for the work to be performed in a mixed delivery model using both offsite resources (within country) and offshore resources, at a blended rate.

Low personnel costs are a given for the typical offshore outsourcing value proposition, but there are associated, important buyer considerations such as location attractiveness. This requires informed comparison of potential offshore locations on cost and maturity dimensions to identify the correct location for the work to be performed to an acceptable standard.

Above all, identify which of your internal tasks need to be outsourced. Making a list of all your in-house activities will help give you a better insight over which task will benefit the most from outsourcing. Group together the tasks which are interrelated since it will not be a good idea to separate them. Whether you choose to outsource these tasks or leave it in-house, it would be better if related activities are performed side-by-side. When you’ve completed your list of functions, prioritize which ones need your individual attention, and which ones can be entrusted to an outsourcer.

What drives SMBs to IT outsourcing?

The SMB market is eager to find affordable IT solutions that are easy to use. SMBs want IT solutions that are easy to install and configure, and require minimal customization and integration. More importantly, they demand responsive and reliable after-sales service and support. SMBs don’t take customer service and technical support for granted. For many small companies, a solution provider’s technical support isn’t merely a convenience; it’s a business-critical IT service, because of their resource constrained IT staffs.

Most outsourcing providers are specialized on the early adopters of outsourced software services – large companies multinationals. Therefore there are few specialized providers for SMBs and able to adapt to their business model and needs. Yet small-sized, SMBs are still technology-intensive businesses that require great attention from outsourcing providers. Small businesses should choose outsourcing their IT to those providers with experience in managing SMB projects.

Benefits of IT Outsourcing for SMBs

Cost Savings

Lower cost is one of the primary reasons for outsourcing. The cost savings are commonly based on the wage difference between the Western world and offshore destinations. Other factors such as economies of scale and specialization could also have a considerable impact.

Knowledge & Expertise

Outsourcing gives you access to knowledge pools that you might not have inside your own company. Outsourcing also enables you to focus on your company’s core business and competences.

Capacity Management

Outsourcing gives you a tool to manage your output or production capacity in a flexible way.

Staffing

By using external resources, you can overcome possible shortages on the job market. This is especially the case for highly specialized roles in, such as the information technology industry.

Conclusion

Offshore outsourcing has been discovered for quite some time by large corporations but has barely attracted the attention of SMBs. Still, there are many proven benefits that should encourage SMBs to outsource their IT function. And, more important, there are providers of outsourcing services that accommodate on a small business’ model and already have experience in dealing with this kind of projects.

Sri Lanka’s skilled resources are on par with top professionals in the world when considering the IT as well as the mobile sector, Sri Lanka Association for Software and Services Companies (SLASSCOM) Chairman and CEO of hSenid Software International, Dinesh Saparamadu said Daily News Business at the launch of MobileMonday, Colombo in Sri Lanka.

Mobile phone use will saturate in the future and innovative applications to mobile phones will have to be introduced instead. Today, mobile phones have various applications through which one can access the internet and perform transactions.

It is expected that this will bridge the digital gap between the haves and have nots, SLASSCOM Chairman, Dinesh Saparamadu said.

In the next five to eight years, direct IT BPO professionals will be elevated to 100,000 which is 30,000 at present.

“Sri Lanka was one of the very first to adopt latest technologies in mobile such as MMS and 3G technology. There was fierce competition in the mobile industry and the price was dominated by the operators. The situation should be altered with stable prices for the industry to be stable,” he said.

Mr. Saparamadu said Sri Lanka is in the process of developing more advanced mobile applications in the region, especially software applications which at present taken to the world. Sri Lanka has developed a market even in South Africa for software applications.

SLASSCOM is focused on conducting projects in the Northern and Eastern areas. “We want to bring out awareness and recruit the resources from those areas. Later, we will take projects into those areas. We have conducted a career fair in Jaffna in collaboration with the ICTA. And we want to assist University students in those areas to go inline with the IT BPO industry,” he said.

He said SLASSCOM will work closely with University students to increase capacity.

“We expect to place Sri Lanka as the IT BPO destination in the region focusing on product developments. To achieve that Sri Lankan IT BPO sector has to cater to the small and medium scale companies that are interested in doing their product innovations in Sri Lanka, especially in the research and development areas,” he said.

He also said interactive opportunities such as MobileMonday Colombo will be a stage for issues in the mobile sector while it builds healthy relationships between the professionals and interested parties in the mobile sector.

MobileMonday is a global community of mobile industry visionaries, developers and influential persons fostering cooperation and cross-border business development through virtual and live networking events to share ideas, best practices and trends from global markets.