What if you were able to boost the productivity of your IT department and get products on the market faster, while cutting your costs dramatically?  Many companies have been able to accomplish these goals by global sourcing a component of their IT services.  This topic has generated a lot of heated debates, but the bottom-line is that businesses are able to benefit substantially by using global sourcing providers.  Today, most of the Fortune 500 companies are outsourcing at least one of the daily business operations to global sourcing partners.

Some of the major benefits of global sourcing are listed below.

Expanded hours of operation. Most businesses put a major emphasis on a project’s budget, which is important.  However, it is just as crucial to focus on the time it takes to get the project done.  When working with a global sourcing provider, you are able to have an IT department that runs 24 hours a day.  As the workday for your U.S. employees comes to an end, the vendor’s employees will just be starting their day.  For IT managers, this schedule is extremely productive.  They can review a project, make suggestions and send it to the global sourcing partner.  When the IT manager returns to work the next day, the revisions have been made and the development process is able to continue.

Access to qualified IT personnel. According to a Duke University study, businesses are looking for offshore employees because there has been a steady decline the number of engineering and science graduates in the United States.  It is estimated that countries such as India and China graduate 12 times more engineers than the United States.  Many of these graduates are fluent in English, which makes them attractive to U.S. employers.

Ability for rapid scaling of operations. A global sourcing provider can be used to grow or downsize an IT department very quickly.  Global sourcing also gives the outsourcing company the ability to easily add or subtract a new type of software.

Better reach in the global market. By mere geography alone, global sourcing helps companies looking to expand globally.  Global sourcing allows businesses to reach international customers and provide improved service and problem solving.  Having different locations gives the outsourcing company more flexibility in making sure that the business continues even in the case of a disaster.

Accelerate technical implementations. When your company is looking to create a new system or business process, it can be done fairly quickly with a global sourcing partner.  Many vendors already have the necessary hardware and software in place, which makes it easier to turn ideas into actual products.

Provide seasonal workforce flexibility. Workload can fluctuate depending on the amount of projects currently being handled by your IT department.  A global sourcing partner can be used on an “as needed basis,” meaning they complete projects during the busiest times for your company.  By using a seasonal workforce provided by a global sourcing partner, your company can avoid the hassle of hiring temporary IT employees.

Cost reduction. The salaries paid to employees in many other countries are considerably lower than the amount that U.S. employees are paid.  In some countries, the average amount that an IT employee earns is less than 30% of a U.S. employee’s salary.

Global sourcing greatly reduces the cost of production and operations, as it decreases the amount paid on overhead.   As costs go down, the financial position of the company strengthens, which in turn frees up more money that can be used for core business services and new development.

Global sourcing is a resource worth considering for most IT departments.  A&E Consulting can help you choose the right global sourcing partner and will assist you in establishing the business relationship.  In addition, we will manage the first outsourced project to make the transition as smooth as possible.

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Tags: global sourcing, global sourcing partner, global sourcing provider, it outsourcing, offshore firm

This entry was posted on Tuesday, June 24th, 2008 at 7:00 pm and is filed under Global Sourcing - General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.