OFFSHORE OUTSOURCING: BUSINESS MODEL, ROI, AND BEST PRACTICES

OFFSHORE OUTSOURCING: BUSINESS MODEL, ROI, AND BEST PRACTICES

Marcia Robinson and Ravi Kalakota

Mavar Press, Alpharetta, Ga. 2004

The authors open the book with a definition of offshore outsourcing, and draw a distinction between offshored and outsourced processing, clearing the misconception that all offshoring involve outsourcing. They point out that unlike outsource processing, offshored processing can be handed to third-party vendors or remain in-house in a company's remote low-cost location. They identify, at the outset, integration of skills and management practices, management commitment, and organizational culture that encourages and supports effective offshore as elements critical to the success of offshore outsourcing. They also identify three phases of offshoring including entry, development, and integration process that offshoring companies go through for successful offshore business.

The authors give descriptions of numerous offshore outsourcing models based on the dimensions of ownership or relationship structure, and the geographic location of the work. To supplement these models, the authors also describe the models from the perspective of approach as task-oriented (piecemeal) and process-oriented (comprehensive) revenue models. The authors point out that the success of offshoring venture depends on the depth of analysis conducted and time spent to select the right model.

The authors address extensively business process outsourcing (BPO) and information technology outsourcing (ITO) citing lower cost of...