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  • Outsourcing

    1. 1. India
    2. 2. IndiaThe Economic Effects of Outsourcing
    3. 3. Outsourcing Around the World• Contracting with another company/person to do particular function• Almost every organization outsources• Function being outsourced = non-core to business• Outside firms providing ! This
 outsourcing services Outsourcing
 service providers that
    4. 4. Outsourcing Around the World• Crucial aspects of business should probably not outsource • Cash-flow management and customer interaction• Biggest benefit: saves you money • Depends company size and what is outsourced• Disadvantage: Putting part of company in someone elses hands • Trust, ability to adapt are key
    5. 5. Outsourcing Around the World• Smart outsourcing can juice performance of established players• Firms are learning to capitalize on global talent pools to rush products to market sooner at lower costs• Aggressive outsourcers using low-cost, efficient business models to challenge incumbents• With low-cost engineers, financial analysts, consumer marketers, architects now readily available via Web, CEOs see quicker benefit
    6. 6. British Occupation• 1773, India = semiofficial agency of Britain• Britain slowly overtook the entire subcontinent• East India Company given complete control• Britain caused quick modernization • Telegraphs, railroads, roads, and postal services• India natives fear modernization• Sepoy Rebellion causing British crown to take control
    7. 7. British Occupation• Many rebellious groups formed• Indian National Congress main rebellion group• England tries to reform to counteract the rebellions• Gandhi starts silent rebellion• August 15, 1947: Indian Independence
    8. 8. Beginnings of Outsourcing • Companies realized that India had highly trained workers, low cost structure, English language skills•Two things happening making outsourcing to India optimal: 1) Indian government policy became friendlier to entrepreneurial companies 2) Satellite and fiber optic communication improved dramatically between English speaking countries and India
    9. 9. Outsourcing in India• India = vital destination for outsourcing• Rapidly growing industry• Grew at the rate 38% in 2005 ! Indian workers for the Canadian company Bombadier
    10. 10. Outsourcing in India• 75% of US and European multinational companies use outsourcing to support financial functions• 71% of European compaines and 78% of U.S. companies plan to keep services within next 12-24 months• 29% of US and European companies expect to increase use of outsourcing of financial functions
    11. 11. Assignments Outsourced to India• Business Process Re- engineering• E-Commerce• System Migration• Maintaining Legacy Systems• System Integration• Telemarketing
    12. 12. Familiar Companies• Oracle • CITIBANK• Hewlett Packard • JP Morgan• Schlumberger • GE Capital• ATT Wireless • Dell Computer Support• Texas Electronics • Mastek Limited• TransUnion • Orcim Soft, Inc.• Rand McNally
    13. 13. OutsourcingMain advantages of India as an outsourcing destination:• Flexibility• Technological competence• Quality output• Cost control facilities• Time-to-market
    14. 14. Positive Impacts of Outsourcing in India• Approximately 230,000 new jobs are created each year• Integration of people • Highly skilled people outsource in poorest areas• Outsourcing brings investment and support to poor areas• Improves economy • Build jobs and maintenance of infrastructure• Opportunities and recognition from multinational corporations.
    15. 15. Negative Impacts of Outsourcing in India• Exploit the poor• Significantly underpay workers• Forced into culture • Must adapt American names and take Americanizing classes• Disregard for Indian holidays
    16. 16. Positive Impacts on Other Nations• Beneficial to some nations, especially if developing and do not possess ability to produce own goods• Outsourcing allows access to low price products, such as former Soviet states• States also attempting to get into the outsourcing market
    17. 17. Negative Impacts on Other Nations • Outsourcing can hurt nations that have been historically manufacturers • Germany and production of chemicals • Industrial Revolution • Germany became Europe’s leading producer of commercial chemicals • Wages increase and regulations become stricter, German companies began to take jobs elsewhere • Putting many people out of work
    18. 18. Positive Impacts on USA• Allows customers to purchase goods for less, • Allows stores (Wal- Mart) to sell massive amounts of goods produced outside of United States• Allows common consumer to purchase more goods on same amount of income, increasing the happiness of average American consumer
    19. 19. Negative Impacts on USA• Outsourcing takes away manufacturing jobs in U.S.• Leads to increased competition for remaining jobs left,• People without education have difficulty finding job• To compete with outsourced jobs, domestic companies must cut wages or other benefits to keep costs low• Must be more efficient than counterparts
    20. 20. Social Reactions in USA• Strong public opinion against outsourcing• Supporters draw on mainstream economies to argue that outsourcing should bring down prices, providing greater economic benefit to all
    21. 21. http://www.hulu.com/watch/194372/outsourced-whats-thanksgiving#s-p5-sr-i1
    22. 22. Works Cited• "Outsourcing - What is Outsourcing?." SOURCINGmag.com. CTQ Media, 2011. Web. 29 June 2011.• Engardio, Pete, Michael Arndt, and Dean Foust. "The Future of Outsourcing." BusinessWeek.com. Bloomberg L.P., 30 Jan. 2006. Web. 29 June 2011.• Lowe, Keith. "The Pros and Cons of Outsourcing." Entrepreneur. Entrepreneur Media, Inc., 4 Mar. 2002. Web. 29 June 2011.• http://business.mapsofindia.com/india-company/outsourcing.html• http://en.wikipedia.org/wiki/Business_process_outsourcing_in_India• "The Outsourcing Institute." The Outsourcing Institute - THE Professional Resource for the Outsourcing Industry. Web. 29 June 2011. <http://www.outsourcing.com/content.asp?page=01b/other/oe/q405/ moneymatters.html>.• Ram, By Sudhakar. "Indias Next Outsourcing Wave - BusinessWeek." Businessweek - Business News, Stock Market & Financial Advice. Web. 29 June 2011. <http://www.businessweek.com/globalbiz/content/mar2010/ gb2010039_433787.htm>.• "TIME Magazine Cover: India Inc. - June 26, 2006 - India - Globalization - Telecommunications - Business." Breaking News, Analysis, Politics, Blogs, News Photos,Video, Tech Reviews - TIME.com. Web. 29 June 2011. <http://www.time.com/time/covers/0,16641,20060626,00.html>.• "Union to Protest Mexico Outsourcing Conference « Machinists News." Machinists News. Web. 29 June 2011. <http://iam751.wordpress.com/2010/11/15/union-to-protest-mexico-outsourcing-conference/>.• http://www.virtualemployees.com/history_of_outsourcing_to_India.php•