Not without reason, outsourcing has become an acceptable operational alternative and is being embraced by companies in the US and Europe , also gaining in popularity in other parts of the world. For IT offshore outsourcing India is the most popular destination due to the large pool of highly educated IT professionals, knowledge of the English language and presence of the required infrastructure.

WHY SHOULD YOU OUTSOURCE?

Outsourcing is obviously a means to get work done by talent outside your organizational pool. Companies outsource for different reasons, depending on individual requirements. Some outsource for cost savings, others to gain skills and resources lacking internally, still others outsource in the hope of gaining a strategic edge over the competition. We can, therefore, sum up the most important factors why companies outsource:

Financial
Access to the outside provider's lower cost structure allows considerable savings of operational and development costs. At the same time all costs are getting clearly outlined, predictable and therewith manageable.

Flexibility
When companies outsource they become more flexible, more dynamic, and better able to change themselves to meet the changing opportunities. Flexibility can be achieved in terms of capacity and technology. Shifting to a new technology becomes a matter of a notification rather than reorganisations and training courses.

Market agility
Market agility includes the ability to expand core businesses rapidly and involves better information management for decision making and expansion to new geographic markets.

Improve speed and service
Outsourcing gives a competitive edge in terms of deliverable speed, increased service levels and access to specialised skills. Establishing a long-term, strategic relationship with world-class service providers allows a company to adjust the IT requirements to the ambitions of the company rather than being restricted by the performance and output of the corporate IT department.

Thereby companies can also choose for outsourcing in order to:

• Reduce IT overheads, free up resources
• To gain a fresh and new perspective on a stalled project.
• Avoid capital expenditure
• Offload non-core functions
• Focus on strategic thinking and managing trading partner relationships
• Improve company focus.
• To increase project speed and reduce lead time: Use more capacity and exploit the Time Zone Advantage
• Non-core business functions are on an "as used" operational expense basis.
• Share Risks: No investment in trendy new technologies
• Scaleable

FACTS AND TRENDS

Currently the large companies are active players in the field of outsourcing. Outsourcing is quite a step to take but more and more medium and small scale companies discover the potential of outsourcing. Companies currently outsource for 8 billion dollar a year and is expected to increase to 17 billion in 2005. Gartner expects 75% of the larger European companies to consider outsourcing by 2004.

Global giants such as IBM, Microsoft, Novell, Oracle, AT&T, Fujitsu, Motorola, Digital, Hewlett-Packard Philips, General Electric, IBM, Reebok, Fujitsu, British Aerospace, General Motors and Sears are keeping ahead of their rivals thanks to the competitive advantage conferred on them by some of the best software companies in India.

But by far the most important benefit of outsourcing for me is the increase in flexibility. If I need a large project I am no longer restricted by the capacity of my own IT-department in London. Then I call India and when required large number of people can be deployed additionally.
Neiland, Deutsche Bank

PITFALLS

Although outsourcing offers many benefits, there some aspects that require special attention:

• Communication barriers
• Cultural hindrances
• Language difference
• Partner selection
• Management of collaboration

EASTERN ENTERPRISE

Eastern Enterprise is an independent Dutch company with a presence in India.

Thinking global and acting local, that is our credo!
We can be of immense value to you because of our local presence in India. By doing so we are a perfect gateway to target the potential of the Indian industry and market.

Global concept, Local presence. Eastern Enterprise is a dynamic young organisation with a clear focus on building and maintaining relationships between Western companies and Indian counterparts. We have the requisite knowledge, contacts and expertise to carry out complex international projects successfully:

• Strategic and Market Entry studies.
• IT Outsourcing Projects, both Onshore as well as Offshore.
• Outsourcing Engineering and Research Projects.
• Representation and liaison projects.
  
  In a nutshell you can rely on us if you need:

• Us to do research on market entry situations for you.
• Us to initialize, monitor and evaluate projects for you.
• Us to represent you in India.

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