Outsourcing and the Small Business Outlook
By Julie Gerstein |
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We all know that IT and call center jobs have been outsourced to foreign companies, but did you know that accountants outsourced $100,000 in U.S. tax returns to India in 2005? It’s expected that $400,000 will be done there this year. Though some industries are finding that outsourcing hasn’t reaped quite the rewards that were initially anticipated (IT executives said they expected outsourcing to cut costs by 50 percent; outsourcing has—on average—slashed expenses by 10 to 20 percent), outsourcing continues to be a major issue for both large corporations and small businesses.
Outsourcing is used to support a surprising array of industries. For example, many small- and mid-sized hospitals send CAT scans to India for interpretation by Indian doctors during sparsely staffed night shifts. Basically, anything that can be digitized and sent electronically can be sent overseas.
Right now, the infrastructures in these countries only can support back office type work––administrative-oriented grunt work––and support services. In a recent Los Angeles Times article, Tom Miller, a senior consultant to Dieringer Research Group, Inc, a firm that compiles annual studies on working at home, explained that “Work done in India tends to be more routine, the telework done in the U.S. is more professional.” Anything that requires analytical thinking, specialized knowledge and judgment, which experience or proximity to the customer brings, tends to stay firmly routed in U.S.-based offices.
Still, Miller predicts that more than half a million of the 2.25 million U.S. call-center jobs will be outsourced in the coming years.
What does this mean for your small business? It’s important to understand how large company’s outsourcing decisions affect both your local economy and the economic trends of your specific field. If you happen to be in an IT or support-related industry, you should consider how what your business provides differs from the services of international outsourcing firms. Do your employees possess strong sales, customer service and analytical thinking skills? Are those critical components of your company’s philosophy? If not, then concentrate on cultivating those competencies and others which haven’t been outsourced—yet.
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