What Is Outsourcing A Basis Question

Published Date: 02 Nov 2017

With computer systems and projects getting complicated these days most of the companies and their respective managers give their projects or system service and customer support to the external parties. The common name for this type of operation is "Outsourcing". This project is to just an attempt to explain the pro’s and con’s and benefits of outsourcing in Travel firms to enhance developments or implementations.

Introduction

BPO { business process outsourcing } has always been in a confused state of viewers and supporters. BPO is basically contracting of the company’s internal operations, sales and customer support to the external parties. This kind of services help company’s in cost cutting and proper function of the outsourced departments.

What is Outsourcing a basis question for all and the answer is

"Outsourcing" means sharing organizational control with another organization, or a process of establishing network relations within an organizational field.

"Offshoring," on the other hand, represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control.

Offshore-outsourcing has provided many businesses with the opportunity to harvest the benefits of lower labor costs and to exploit the value of less than par foreign currencies.

Outsourcing initially started in the 1980's. It basically included delegating certain operations to an external entity specializing in the management of that operation. The decision to outsource is often made in the interest of cutting down on business expenditures and to make optimum use of available resources.

In general departments such as It, HR, customer support, sales, manufacturing and engineering are the once being outsourced. As the main motive of outsourcing any function is to lower cost it helps in increasing the productivity and increases the quality to cost ratio. In the last 15 to 20 years, with the help advancements in the IT and telecommunications a lot can be achieved with a lesser cost.

The "vast majority" of call centers in the UK have "existed for less than ten years" claims Cameron, while Michel notes that in Germany, 25% of call centers in the country were established before 1991, and 41% during what he terms the "call center boom" after 1995. A boom is perhaps an accurate term. One estimate suggests a rate of growth between 20%-25% a year in Canada, while a 1996 Data monitor report gave a figure of 40% for call center market growth in Europe, a number anticipated to hold until the turn of the century.

The most recent NASSCOM numbers place the BPO industry in 2004-05 at $ 5.2 billion in annual revenues – this is a scorching 44% rate of the growth for the industry and it is clear that many Tier 1 players have actually grown much more than that.

Outsourcing can also present advantages to non-Western states. Outsourcing in developing countries such as India and China will increase their wages, employment and job prestige. According to current data, the business process outsourcing (BPO) industry in India employs around 400 people every day with the people exiting from this sector being around 12% of the total workforce.

The recent Nasscom-McKinsey Report 2005 on the Indian IT industry says the addressable offshoring market of BPO can go up to $120-150 billion from the current $11.5 billion. Even in its projections of $60 billion in IT export revenues, it expects the BPO segment to contribute $ 25 billion.

The Indian ITES-BPO (IT enabled services and Business Process Outsourcing) industry continued to be a high potential, high growth segment within the country’s overall information technology and telecom industry, contributing close to 20 per cent of the IT-ITES industry’s revenues in 2004-05.

The Indian ITES-BPO market has been notching up record growth rates (often in excess of 50 per cent). During 2004-05, the industry achieved a momentum of around 44.4 per cent, with revenues touching approximately US$ 5.8 billion. Secondly, the industry has shown a Compound Annual Growth Rate (CAGR) of 56.4 per cent over the 2000-05 phase, higher than any other industry segment in India.

Evolution of OFFSHORE outsourcing

1st Generation: Outsourcing was importing high quality and low cost labors offshore with temporary visas. Initially this technique helped them in cost cutting and improving the work quality.

2nd Generation: The pure "Offshore Production" phase, were in the regional offices were shifted to various developing countries and the supervisor to the management were there own.

3rd Generation: The "Onsite/Offshore" model emerged, were in the projects were leased to the companies capable of handling the project.

4th Generation: The "Seamless Integration" phase, 4th Generation Offshore Outsourcing provides the best of both worlds: the low-cost of offshore development coupled with critical management presence with which customers can interact with on a regular basis, forming meaningful partnerships that allow the customer to focus on its business, rather than the technologies necessary to support it. This approach to outsourcing is suitable for projects of high complexity large scale transformational outsourcing. The 4th generation offshore outsourcing provider is the ideal partner for helping enterprises undergo profound business transformation.

The Outsourcing History of India

Outsourcing of work started of in 18th century in India. Initially the highly skilled, high quality and low cost labors were exported to other countries from India on temporary visas. Later the entire work process got shifted to other developing countries such as India / China. The pure "Offshore Production" phase, were in the regional offices were shifted to various developing countries and the supervisor to the management were there own. The "Onsite/Offshore" model emerged, were in the projects were leased to the companies capable of handling the project. The "Seamless Integration" phase, 4th Generation Offshore Outsourcing provides the best of both worlds: the low-cost of offshore development coupled with critical management presence with which customers can interact with on a regular basis, forming meaningful partnerships that allow the customer to focus on its business, rather than the technologies necessary to support it. This approach to outsourcing is suitable for projects of high complexity large scale transformational outsourcing. The 4th generation offshore outsourcing provider is the ideal partner for helping enterprises undergo profound business transformation.

Outsourcing to India

Why Outsource to India?

India has a good quality of software development rate and India’s technological growth is almost as good as the developed countries. Also the reason behind the call centre projects being transferred to India is the neutral voice quality understandable by the people across the world.

What can be outsourced to India?

As discussed above India market is best for outsourcing sales, IT and customer support due to the best resources available.

Job Outsourcing to India

The growing literacy rate in India and technological advancement allows us to work for the IT projects being outsourced and also the sales and customer service project being taken care by the graduates with good command on English language.

High Rise Bangalore

Bangalore, the silicon city, with its large number of IT/ITES companies, R&D and product development facilities, and Business Procees Outsourcing the demand for commercial space with large floor space has risen drastically. These companies want good infrastructure like large space of around 40,000 to 50,000 square feet with high ceiling heights, good broadband connectivity.

Fundamentals

In outsourcing, the main deciding factor is based on the price of delivery of services by an external contractor/company. In outsourcing, though price of delivery is a primary factor, care should be taken to compare price against the overall package offered by the external contractor/company. In brief, good competitive price is one which matches the services rendered by the company in respect to their skills/competency and experience, and timely delivery. The organization also needs to consider outsourcing in light of its long term strategic directions and its information needs.

Competition is another area to be carefully considered. Healthy competition opens up opportunity for all potential suppliers to conduct business effectively with the organization. Through the competitive process, it allows organizations/Managers to derive the best outcome. From the open and effective competition, the organization is then able to judge soundly in determining the best strategy after it has taken into account of the competition and value for money principle.

Managers can go through lengthy procedures to minimize problems with outsourcing, but still things can go wrong and intended objectives may not get achieved. To overcome such mistakes, it may be prudent to look at other companies that have undertaken outsourcing and learn from their successes and mistakes.

Listed below are some of the major issues to be considered when using outsourcing:

· While outsourcing Manager must be able to clearly identify long term strategic directions and long term information needs.

· Business objectives must be clearly defined by Organization.

· It would be prudent to incorporate an "extraordinary events" clause into any contract to avoid unnecessary friction between the organization and the external service provider. Any extraordinary changes in circumstance that should occur must be covered by this clause so as to allow a lot of flexibility between the two parties.

· The external and internal stakeholders and the impact of the outsourcing on stakeholders must by identified by the Manager.

· To avoid duplication and waste of manpower, Manager should learn from other companies, use their mistakes and successes.

· The manager should communicate regularly with anyone in the organization who is affected by outsourcing, even if the affect is very small.

· The external service provider should be informed by the Manager exactly what is expected of them e.g. the exact services required.

· To ensure the best possible outcome from the service arrangement the Manager should allow adequate time and the correct resources to the problem at hand.

· Skilled staff should be assigned to manage the external contractor and to monitor closely the external contractor’s performance by the Manager.

· The manager should monitor and assess the contractor to ensure quality of the service not just price of the delivery of services.

The Main Strategy

In an organization, the IT infrastructure components are comprised of a number of technical and service areas. While outsourcing decision process, the organization needs first to assess its sourcing across the entire IT infrastructure. Once this is done, the best sourcing strategy against a number of perspectives can be determined by the organization.

In order to determine the optimum sourcing strategy, an organization needs to look at a number of perspectives or alternatives and then balance these perspectives with the benefits and risks of outsourcing. With this information, an organization can derive a more structured methodology for a balanced view of the IT infrastructure, service elements and its components.

It can be stated that there is no one approach to outsourcing. However, in practice there are three common methods used by the practitioners. They include:

1 Outsourcing a significant proportion of the IT services, customer support, sales and technical areas. This approach has a lower co-ordination cost and also has a greater organizational impact;

2 Assessing each IT service, customer support, sales and technical area independently, a number of vendors are used to match the needs of each outsourcing event. This approach selects the best vendor and deal for each outsourcing arrangement. However, it involves higher internal costs and synergy problem;

3 Selecting a prime contractor. The prime contractor can select and manage all other vendors. This approach depends on the importance of learning curve and therefore, it takes longer.

As part of the determination of outsourcing strategy, the organization should incorporate any experience derived from other organizations that have outsourced and other forms of outsourcing that the organization has undertaken. An initial investigation on the potential vendors background must be performed by the organization. Furthermore, the organization should examine different kinds of outsourcing forms that the vendors are able to provide.

The organization must identify all the internal and external stakeholders and the impact that outsourcing may have on them and their objectives. The internal stakeholders include IT staff, customer support & sales team, users and management and the external stakeholders include unions, customers, and existing suppliers.

The cost benefit analysis of all internal costs and external provisions must be undertaken by the Manager. This provision include capital investment, ongoing expenses and the commitment of time and resources. Once a cost baseline is developed, an organization can come up with a more objective cost analysis. It can then assess the related components of the vendor's proposal against this cost benefit analysis before making any decision regarding the outsourcing.

Successful Outsourcing

For a firm to successfully outsource its customer support & sales functions, there are a number of factors that need to be addressed.

An organization cannot abdicate itself from the responsibility from the activity that it has outsourced its customer support & sales functions to an external contractor. In other words, there is still a need for the organization to retain overall control of its services being outsourced. In addition, the organization needs to regularly monitor the external contractor to ensure that they continue to deliver quality service and to perform at the required standard as agreed in the contract arrangement. To be able to do this, the organization must ensure that it can maintain sufficient technically competent "in house" staff to oversee the contract service agreement.

Before an organization outsources its customer support & sales functions, it is very important that it prepares a sound full cost estimate for all existing internal computer systems & infrastructure so that it can determine whether the outsourcing is cost effective. Failure to do so can be critical.

For any successful outsourcing, a good solid contract is essential. The contract should also allow for flexibility as it is difficult, in the life cycle of the contract, to predict every circumstance or cover every eventuality. Successful outsourcing should be based on partnership between the organization and the external contractor.

Outsourcing an organization's customer support & sales functions without proper consultation with employees can cause a lot of stress among staff and reduce their morale. The result may be a loss of some key technical and specialist staff from the organization. A more open and timely communication with employees can minimize this impact and uphold the staff morale. Organization can allay the fears by outlining career options and opportunities for its staff within and outside the organization and also by explaining the benefits of outsourcing to those affected employees.

The Economics of Outsourcing.

There are many reasons a company may choose to outsource its customer support & sales function. These couple of paragraphs address the two main reasons for this action

1 The conception that outsourcing is cheaper

2 The expertise required best and smooth customer support & quality sales does not exist within the company.

In the past, it was difficult to compare the cost of outsourcing a customer support & sales process against the cost of in - house process, mainly because there was no functional sizing metric agreed upon prior to the start of the contract. In all sophisticated industries cost per unit (or average cost) is an important consideration, where average cost is total cost divided by total output. The same concept can be applied to customer support & sales using function points. Total in house process cost divided by total function points is an average cost calculation. Once average cost is determined, all prospective developers, in-house and outsource, can be compared on an equal basis.

Just as important is the ability to adequately evaluate the delivered product, considering several factors: size, quality, time to market, and so on, using functional metrics total delivered function points can be contractually agreed upon prior to the start of the contract, assuming the company contracting the customer support and sales has clearly defined the final product. This is a dramatic change in the way customer support and sales projects historically are managed. Any change in the number of total delivered function points once the project begins will impact the average cost calculation. Changes, additions, and even deletions to the customer support and sales become more expensive per unit as you move through the development life cycle. Since the consumer of the custom built customer support and sales system wants to minimize unit cost, it is therefore in their best interest to sufficiently define requirements prior to the start of the project.

The ability to compare cycle time, or time to production is also important. Time to production is defined as total number of function points delivered divided by elapsed calendar time. The least expensive outsourcer or contractor also may be the one whose delivery date is the latest out. The buyer of the customer support and sales process must decide if quicker time to production is worth the extra expense.

The number of acceptable defects delivered per unit of size is another important evaluation metric; with higher quality comes higher process running costs. But delivering proper customer support and sales support with numerous embedded defects will be expensive to maintain and will cost more in the long run.

The considerations of outsourcing change dramatically when you view the relationship from the perspective of the outsourcing firm.

It is important to the outsourcing firm that the average unit cost for customer support and sales are kept to a minimum. Fixed-price contracts create an environment that pushes average costs lower for subsequent projects.

Outsourcing firms have a great incentive to maintain a customer support and sales: reuse of components in future projects. If this library is thoroughly tested, ensuring that it is nearly defect free, and documented so it can be easily understood, it can be used with confidence to lower average costs over time.

Additionally, outsourcing firms have a great incentive to keep their staffs trained in the latest software languages, tools, products and techniques. As more outsourcing projects are undertaken, the responsibility to keep staff knowledgeable and up-to-date transfers from the in-house development team to the outsourcing firm. The outsourcing firm assumes the risk of investing in the technical staff - if their people are not trained on the latest software technologies, they cannot remain competitive with other outsourcing firms who have staffs with state-of-the-art skills. They willingly assume the risk with the expectation that these training initiatives will lower future average costs.

Unfortunately, it is still the norm in the customer support and sales process arena, and in outsourcing cases in particular, for an organization to be ignorant of the average size and average cost of a customer support and sales project. All other sophisticated industries calculate and monitor their per unit average cost. As the customer support and sales industry continues to mature, not only will it be common practice to know average costs in dollars per function point, it will be required.

" How does outsourcing effect Travel Industry ? "

Travel industry is an industry which has achieved a good amount of growth. According to the World Travel and Tourism Council calculated that tourism generated $121 billion or 6.4% of the nation’s GDP { Gross Domestic product } in 2011. Also the outbound tourism { Travels going outside country } has increased so as the companies planning there tour. There N number of small travel firms being established these days. Few even achieve the goal of hitting their target audience. Most of the service industries { not only travel firms } grow on the basis of 80:20 principal.

80:20 principal is basically retaining their 80% of the customers and hitting on the 20% of new customers. This 80% helps them achieve their targets and also sometimes achieve MOS { Margin of Safety }. And the rest 20% helps in achieving the estimated profit statistics.

Now how does OS {outsourcing} effect this system or why OS would help this system ?

The answer is OS gives a good customer service support to any travel firm which helps them to work on their 80% also the upcoming travel firms think upon investing in infrastructure and giving up that time to customer support OS helps them doing that. Also OS can bring a drastic change to their up selling and boosts up their sales. Even OS sales is also a good idea cause the travel firm need not spend a lot on the dedicated team instead they can just OS their process.

In this way any small scale travel firm can OS their process to get a good stability in the market and also generate good amount of numbers { Profit }

Pros and Cons Outsourcing in Travel firm

Pros :

This would reduce the cost to the company

This would increase the number leads per day

This would increase the quality of customer support

Help retaining clients

Would also increase the sales { If a sales process }

Cons :

We need a dedicated team for the best service and not always possible that each and every team member would be equally skillful.

SLA’s cause cost reduction while verification if the team working on the process is not proper.

Employees don’t be stable, this seen the most in outsourcing firms.

Initial investment is high and the breakeven is of about two to three years.

Also due to data protect act testimonials and leads cannot be exchanged which would be an factor effecting to get sales process.

Popular News Articles About Outsourcing

{ http://articles.economictimes.indiatimes.com/keyword/outsourcing }

NEWS

Cantor Fitzgerald to set up backoffice operations

September 7, 2003 | Sangeeta Kulkarni , TNN

MUMBAI: Joining the likes of investment banking firms such as JP Morgan, Morgan Stanley and Merrill Lynch, US-based financial products and services provider Cantor Fitzgerald & Co has decided to set up a back office captive outfit in the country. Cantor's captive operations will carry out institutional and equity market research. The firm has already established small operations with close to 50 people in Mumbai. Estimates related to the...

United States Among Top Locations for "Offshore" Work, According to A.T. Kearney's Annual Global Services Location Index

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U.S. ranks 11th among 40 countries based on lower-cost cities, with San Antonio as proxy

India, China and Southeast Asia continue to dominate; Middle East and Africa represent "next frontier"

WASHINGTON (November 22, 2005)—While India, China and Southeast Asia continue to dominate A.T. Kearney's annual ranking of the most attractive locations for "offshoring" of service activities such as IT, business processes and call centers, the United States ranks surprisingly well in a new version of the index released today.

For 2005, the global management consulting firm added four lower-cost cities in the United States, United Kingdom, Germany and France to determine how they compare to more traditional offshore locations across the 40 measurements analyzed to create the Global Services Location Index (previously known as the Offshore Location Attractiveness Index). The U.S., represented by San Antonio, ranked 11th out of the 40 countries evaluated.

Additional findings from this year's Index include:

India remains the best offshore location by a wide margin, although wage inflation and the emergence of lower-cost countries decreased its overall lead.

Improved infrastructure and relevant people skills have increased the attractiveness of China as a low-cost option for servicing Asian markets.

Thailand jumped from 13th to 6th in this year's Index and Southeast Asian countries now make up four of the top six locations on the Index.

Offshore attractiveness in Europe continues to migrate eastward as Bulgaria, Slovakia and Romania all enter the Index for the first time.

The Middle East and Africa appear to be the next frontier in offshoring as countries such as Egypt, Jordan, United Arab Emirates and Ghana perform well.

Where Developed Countries Rank

"In previous years, clients kept asking us where lower-cost cities and regions in the U.S. and Europe would stand if they were included in the Index," said Simon Bell, director of A.T. Kearney's Global Business Policy Council. "So we collected the necessary data and, as we suspected, the U.S. in particular scored very well in the Index."

Despite higher costs, the U.S. benefits from the breadth and depth of its skill-base, strong infrastructure and generally positive business environment. The U.K. regions (as represented by Belfast) do not perform quite as well (ranked 28th out of 40), but still match or surpass better-known offshore locales like the Republic of Ireland and South Africa. Germany (represented by Leipzig) and France (represented by Marseille) placed 31st and 35th, respectively, largely due to higher costs and weaker business environments, but still rank among the best locations for people skills and infrastructure quality.

"The performance of the four developed countries is not surprising since mature markets still offer by far the best combination of skill levels, relevant experience, infrastructure and business environment," said Paul Laudicina, managing director of the Global Business Policy Council, the A.T. Kearney sponsor of this research. "The standard Index gives cost factors a 40 percent weighting, vs. 30 percent each for People Skills and Business Environment. If cost savings are given a higher weighting, then North American and West European locations drop down the rankings.

"This strength of developed country service sectors, despite all the hyperbole surrounding the offshoring debate, is reflected in their trade balances. It is worth remembering, for example, that the UK operates the world's largest trade surplus in business and IT services, and the U.S. exports a larger volume of business and IT services than any other country, offsetting more than 10 percent of the total U.S. deficit in manufactured goods."

Highlights of the 2005 Global Services Location Index

Beyond the interest in the relative rankings of these "on-shore" locations, the Index remains dominated by lower-cost countries. The complete results can be viewed at www.atkearney.com.

India and China: still dominating

India still leads by a wide margin. The gap between India and the second-ranked country, China, is larger than the gap between the next nine countries combined. Nevertheless, India's lead has shrunk slightly compared to 2004. This is mainly due to a slight reduction in India's financial attractiveness, the result of wage inflation in India and the emergence of new even lower-cost contenders such as Ghana and Vietnam.

China maintains its second place ranking and partially closes the gap with India, thanks largely to continued improvement in its infrastructure quality and the availability of relevant people skills. For example, the number of development centers in China with CMM or CMMI certifications (an industry standard for rating the process-quality of IT development centers) showed the largest increase of any country in the Index, jumping from 108 in 2004 to more than 277 in 2005. For a growing number of Asian and Western multinationals, China remains the best choice for serving their growing operations throughout the East Asia region - the logical location for IT and back-office support and call centers for China itself, but also a low-cost option for servicing established markets in Japan, Korea, Taiwan, Hong Kong and Singapore.

Central and Eastern Europe: ever eastward

Dynamics in Central and Eastern Europe are instructive. While the more established offshore locations included in the previous years' Indices (the Czech Republic, Hungary and Poland) slipped slightly in the rankings, several newer contenders from the region made strong debuts in the Index.

Despite continuing improvements in people skills, infrastructure and business environment, the Czech Republic slipped from 4th to 7th position, largely because of the rise of Thailand and the Philippines, but also because of increasing wages and other costs in the Czech Republic. Poland and Hungary also slipped from 10th and 11th to 18th and 19th, respectively, for similar reasons. Russia actually improved its position among the original 25 countries (from 21st to 17th), but dropped in the overall rankings to 27th, due to rising wages. Moreover, despite improvements, Russia still ranked 39th out of 40 on business environment metrics.

At the same time, strong performances by three new entrants in the Index (Bulgaria at 15th, Slovakia at 16th and Romania at 24th) reflect what many on the ground have observed - as costs in the most advanced Central European countries converge toward EU-levels, companies are moving farther East in their search for high-skill, low-cost solutions.

Latin America: improving, but still challenged by new contenders

Latin America presents a similar story. While Chile improves its ranking by one position, rising from 9th to 8th, Brazil, Mexico, Costa Rica and Argentina all drop in the rankings, largely due to the rise of other countries. Brazil actually maintains the same score as in 2004, but drops from 7th to 10th place, as it is overtaken by Thailand, Chile and Canada. Brazil continues to score well on people skills as graduation and certification rates rise, but its financial attractiveness suffers from the entry into the Index of new lower-cost countries and its business environment continues to be disadvantaged by the relative inflexibility of its labor laws. Mexico and Costa Rica both improve their rankings (from 14th to 11th for Mexico and from 16th to 14th for Costa Rica) and Argentina holds steady at 15th among the original 25 countries, but they all drop in the overall rankings (to 17th, 21st and 23rd respectively), largely because of new Eastern European and Middle Eastern entrants.

Middle East and Africa: the next frontier

Perhaps the biggest surprise in this year's index is the strong performance by several countries in the Middle East and Africa - Egypt jumps into the Index at 12th, Jordan at 14th, the United Arab Emirates at 20th, Ghana at 22nd and Tunisia at 30th.

"At first, executives are surprised by these results, given the negative images associated with these regions, but upon closer inspection, the advantages become apparent," said Johan Gott, manager of research for this year's Index. "In many ways, parts of the Middle East are similar to India in the early 1990s - very low compensation costs, a segment of highly educated technical workers, and historical exposure to English and other European languages."

While security and stability concerns may be too much for some, a large number of global companies (like Alcatel, Dell, GE, IBM and Microsoft) have already established call center, IT and BPO operations in markets like Tunisia, Morocco and Egypt.

Egypt and other North African nations stress their unique combination of European language skills, technical proficiency and low wages, while others in the region are developing alternate value-propositions. Authorities in Dubai (and to some extent, the other Emirates and neighboring gulf states) are pushing the region as a low-risk alternative to India, offering all the advantages of a workforce imported from South Asia, in combination with unbeatable infrastructure and very attractive tax and regulatory regimes. High-cost compared to others in the Index, Israel is promoting itself as an ideal location for upper-end R&D, as well as multilingual support centers, drawing on the strengths of its education system and the diversity of its population originating from all over Europe and the Middle East.

Two countries perform surprisingly poorly in the Index, despite their emerging success as offshore destinations: Turkey and South Africa. Both countries have succeeded in attracting significant offshore investments (such as Siemens' large operations center in Turkey, and a large Lufthansa call center in South Africa), but they perform poorly in the published Index, since their high costs relative to other emerging markets are not offset by correspondingly higher education levels or business environment ratings.

Implications for global location decisions

"Ultimately, the clearest message from the 2005 Global Services Location Index is the ever-increasing complexity of the location-decision calculus," concluded Paul Laudicina. "As we hear year after year in the FDI Confidence Index (our annual survey of the leaders of the world's top 100 corporations), executives today are faced with an ever-more complex menu of opportunities and risks.

"Over the last three years, the number of countries covered in the Index has jumped from 11 to 25 and now to 40 to reflect the greater complexity of questions that our clients are asking. It is no longer enough simply to spot some low-cost location where basic processes can be performed. Companies need to carefully analyze and segment all of their business functions. Based on the individual language requirements, skill levels, security concerns, regulatory strictures and other criteria specific to each function, they will then find a range of different locations that make sense for different sets of activities."

"For those who have only just begun to recognize the scale of the opportunity, this added complexity may seem a little overwhelming," said Bell. "But the good news is that all this competition is encouraging many countries, regions and cities to take a hard look at their education systems, infrastructure and other fundamental drivers of competitiveness. That ultimately raises productivity and prosperity in all locations. And for companies, it means they are all the more likely to find the ideal solution for each one of their functional needs, somewhere in the world."

About The 2005 Global Services Location Index

1. India

2. China

3. Malaysia

4. Philippines

5. Singapore

6. Thailand

7. Czech

8. Chile

9. Canada

10. Brazil

11. U.S.*

12. Egypt

13. Indonesia

14. Jordan

15. Bulgaria

16. Slovakia

17. Mexico

18. Poland

19. Hungary

20. UAE

21. Costa Rica

22. Ghana

23. Argentina

24. Romania

25. Jamaica

26. Vietnam

27. Russia

28. U.K.*

29. Australia

30. Tunisia

31. Germany*

32. South Africa

33. Israel

34. New Zealand

35. France*

36. Panama

37. Portugal

38. Spain

39. Ireland

40. Turkey

*Based on lower-cost locations in each country: San Antonio (U.S.), Belfast (UK), Leipzig (Germany) and Marseilles (France).

The A.T. Kearney Global Services Location Index analyzes the top 40 services locations worldwide against 40 measurements in three major categories: cost, people skills and availability, and business environment.

The Index assigns weightings reflecting the drivers of offshoring decisions based on A.T. Kearney research and engagement experience. Because cost advantages have been the primary impetus behind offshoring, financial factors constitute 40 percent of the total index weight. People skills and availability and business environment each receive a 30 percent weighting.

The complete top 40 ranking is included in the Global Services Location Index white paper, available at http://www.atkearney.com/.

Conclusion

Outsourcing is the industry and source for not only travel industry but also for many others to do deal with their concerned departments without major capital investment. Hence outsourcing is useful in all the ways. Even in travel industry sales and customer support plays an important role in client and customer satisfaction and for the same quality and high standards can be obtained by high skilled and experienced employees.

The major use of outsourcing is thus achieving best quality of work at lower cost.

Biblography

http://articles.economictimes.indiatimes.com/keyword/outsourcing

http://www.outsource2india.com/why_india/article_index.asp

http://www.outsource2india.com/why_india/articles/outsourcing_history.asp

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