Advantages of Outsourcing in the Global Marketplace
Although it’s developed a bad reputation over the years, outsourcing is on the rise. And with good reason: it’s a solid business strategy. In today’s competitive global marketplace, the ability to outsource can mean the difference between staying in business and closing up shop—permanently.
Today, businesses looking to be more cost and quality efficient seek to outsource to companies in destinations like India, for example. Not only does outsourcing expedite product development and improve efficiency, but it cuts costs while enabling companies to increase their bandwidth, productivity, and output. It also allows companies to scale projects by tailoring their approach for different needs and requirements, while providing services that are outside of their core offerings or expertise.
But while outsourcing is quickly becoming a popular practice, it’s still fairly new to some businesses. Understanding outsourcing and what it can do is important, as it can play a large part in a business’ success and growth.
Core Benefits of Outsourcing
Cost efficient, quality work. Outsourcing offers businesses the ability to produce quality work at a lower cost. In fact, the cost savings for outsourcing business functions can be close to 60 percent. While many might associate low cost with low quality, the quality of the outsourced work is more often far better than work completed in-house.
Increased bandwidth, productivity, and expertise. Eliminating the need to recruit and train in-house resources, outsourcing companies function as an extension of a business’ internal team. With a pool of highly educated, trained and skilled professionals, outsourcing produces quality work, while increasing overall productivity and efficiency.
Expedited product development. There are also benefits to a business’ outsourcing partner being located in another time zone. For example, while businesses might be closed in the U.S., outsourcing companies in India are working to make sure projects are completed on time and to the highest standard of quality.
Focus on core competencies. Businesses don’t always have the expertise to offer everything a client needs or have the internal resources to get certain projects done. Outsourcing allows businesses to focus on their core competencies and build their brand, while fulfilling all client needs.
Risk sharing. Outsourcing companies not only undertake design and drafting work, but also share the risks with the clients involved in the project. This support team can absorb pressures such as tight deadlines and the sudden occurrences of extra work. In this capacity, outsourcing companies can be an offshore ally to global businesses.
Outsourcing Trend: Scalability
To remain competitive in today’s crowded and competitive market, it is crucial to offer in-demand products and services in a way that is attractive to businesses of all shapes and sizes. What sets some outsourcing and external firms apart are their ability to individualize projects based on their clients’ specifications. Known as scalability, it is a company’s ability to tailor efforts to meet each projects’ needs and accommodate growing requirements.
No two companies are exactly alike and neither are a company’s projects. The scope and approach that was successful for one business could be completely wrong for another. Scalability allows each project to receive individual attention, and decreases time and money spent on approaches that will not garner successful results. As a result, companies are lowering costs and increasing efficiencies while maintaining the highest standards of quality.
In order for scalability to be successful, communication needs to be the first priority for both the company—or client—and the outsourcing firm. The firm’s remote team of engineers must work with the client’s internal team to keep project objectives in mind at all times, and make sure the project scope reflects those goals.
Outsourcing and the Engineering Industry
In today’s global economy, the trend toward outsourcing is especially increasing with engineering companies, big and small. In fact, in recent years, computer aided design (CAD) has become one of the most outsourced services in the world.
No matter where a business is located, it can leverage the expertise of skilled and talented engineers by partnering with CAD outsourcing companies to set up a remote, dedicated team of designers that complement internal staff with reliable and affordable CAD services. This technique works for businesses around the world to manage outsourced projects in industries such as architectural design, mechanical engineering, civil engineering and publishing.
While many companies can be wary of employing an outside partner, many common concerns are myths. For example, some believe there is risk in exposing confidential information. However, a simple non-disclosure agreement should be in place before any partnership and will legally protect the company. Likewise, a good partner with a trusted reputation will have a clear contract in place detailing the fees so there are no surprises or hidden costs.
In general, CAD outsourcing can help lower costs and save time for compact design teams while maintaining the highest standards of quality for all projects—an important asset in today’s fiercely competitive global market. In fact, outsourcing design work can save companies 40 to 50 percent compared to in-house hires and eliminates the additional costs of computers, office space, software and benefits.
Sandesh Joshi is the president and co-founder of Indovance Inc. Prior to founding Indovance, Sandesh worked at SolidWorks Corporation as a senior R&D member. He has an M.S. from North Carolina State University with a specialization in CAD.
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