Outsourcing Times

100 Small Business Tips and Tricks for Effectively Outsourcing to India

Who said small businesses can't outsource? There are ways to send your writing, IT tasks and other needs overseas to add efficiency to your enterprise. By doing some prior planning and following some pointers, you can get the quality help you need.

For 100 specific tips on how you can leverage India, visit HRWorld's, 100 Small Business Tips and Tricks for Effectively Outsourcing to India.

China: Painful Outsourcing

Are you planning to outsource your manufacturing to India? Hope you are aware of the risks associated with outsourcing to China. You may have to face quality problems, delay in deliveries and worst of all, theft of your intellectual property. Most people believe that all these problems arise because we don’t understand either the language or the way business operates in China.

One businessman recently discovered that even knowledge of both language and business operations modes doesn’t really help. Edward Wu's experience may not be so unique nowadays as an increasing Chinese Americans try to set up base in their home country.

Despite efforts by the Chinese government to rein in counterfeiting, experts say manufacturers there can undercut their clients by producing similar products at cheaper prices in as little as two years. And Chinese American entrepreneurs have less of an advantage than one might expect. While they may initially get a leg up, economic factors soon trump everything else.

Want to know more? Read on…

Outsourcing The Buyer

2007 will probably be the year procurement outsourcing grew out of the shadows and became a big part of the outsourcing industry. As of now, China is the favored destination for offshoring. Supplymanagement.co.uk reports:

Analysts at the Everest Research Institute say that outsourcing the procurement function of a company could provide five times the savings usually gained from outsourcing other departments. With an incentive like this, it isn't surprising that more buyers and suppliers are attempting to get into the market…Yet cost savings are not the only motivation. Buyers and those further up the corporate hierarchy are pointing to improved efficiency, smarter strategic sourcing and the enhanced compliance that outsourcing brings.

Read more: Buyer, outsource thyself

Outsourcing & OEM Direct Costs

At the TFI's Quarterly Forum recently there was one point that seemed to come up pretty often. That of the knee-jerk reactions of OEMs and their manufacturing partners to the challenges of global electronics manufacturing. The fact that this mode of functioning doesn’t work is pretty obvious. Most of these people seem frustrated with the tactical measures required to meet environmental regulations such as China RoHS.

They are also finding it increasingly difficult to find profitable and socially responsible ways to manufacture the low-volume, high-mix products that represent the next wave of electronics outsourcing for the global arena. One attendee from an OEM member company succinctly expressed this frustration: "I am so tired of the fire drills for WEEE, RoHS, and now China RoHS."

What they don’t realize is that there IS a better way. It’s actually now a time to reconsider their management strategies. In the first wave of outsourcing, OEMs' transferred their manufacturing costs from their bottom line to that of the EMS. Now, they must focus on their internal management costs. They must find ways to increase the efficiencies on the supplier interface and the first step toward this is knowledge.

The best way to gather knowledge is to check out TFI's 8th study on environmental requirements, which focused on OEMs' performance and paths to profitable compliance. The research on electronics manufacturing in India uncovered several trends: Based on a Web survey of over 400 electronics industry managers, TFI projects that the number of electronics companies selling product in India will rise by 24% in the next two years.

Moreover, the number of companies manufacturing in India is expected to rise by 63% during the same period. India’s major attraction to most OEMs and EMS providers is the huge local market, which they can serve. This differs from the typical manufacturing strategy in China. The question for OEMs and EMS providers is the size of India's consumer electronics market.

Sharp Initiates Reverse Flow

Now this is what I call a reverse flow. Sharp Document Solutions Co. of America, a division of Japanese consumer electronics maker Sharp Corp. recently announced its plans to establish a network of 20 branches in America over the next two years. Reuters.com reports:

It is forming a new division, Sharp Business Systems, which opened its first branch on Wednesday, in Phoenix, Arizona, through acquisition of local company Davidson Imaging Systems. It plans to open the other branches, in major U.S. cities, through similar acquisitions.

Read more: Sharp to establish outsourcing network in U.S.

Fuel, food, and outsourcing come together at Shell

When you visit a gas station, it is no more a mere matter of filling up your vehicle. The modern marketing technique has taken over, and you should not be surprised if you get several fringe services to go with the fuel.

For instance, you could walk into the food outlet that is invariably a part of fuel stations these days, and bite into an appetizing snack.Thus, fuel and food go hand in hand these days. However, managing the food outlets at fuel stations is an important cog in the wheel.

In Bulgaria, Shell has 85 filling stations, and the company has now decided to outsource the management of the food outlets in at least 60 of these stations to the ice cream company Jimmy's. Under a five-year contract, Jimmy's will add the jest for food at the select Shell outlets across the country. According to a news report:

The management of the Select outlets, the brand under which Shell operates its food service stations, would represent a new business experience for Jimmy's. The company has so far operated as an ice cream producer and owner of a chain of ice cream parlours.

Jazz Semiconductor to Increase Foundry Outsourcing

Jazz Semiconductor will increase the proportion of its outsourcing to China-based foundries to 60% of the company's total output in the future. Jazz has taken a cautious approach to expand its own capacity. It will widen its collaboration with China-based foundries Advanced Semiconductor Manufacturing Corporation (ASMC) and Hua Hong NEC. About 80% of Jazz's output is from its own facilities and 20% from China. However, in future, the proportion of outsourcing to China will increase to 60%.

Read my previous post titled “China into Service Outsourcing”

Outsource vendors turn journalists!

How often in the past have you struggled over the composition of a press release to highlight your company profile? How often have you amassed a lot of paper research and didn't know where to turn for fine tuning it? And, how often have you thought of launching fancy newsletter for your organization but kept it in abeyance because of a lack of time and know-how?

Well, thank heavens for outsourcing, you can complete all these tasks through a third-party. Outsourcing is no longer confined to the twin pillars of call centers and IT; there are professional service providers who will write, edit, fine-tune, and produce any literature you require—be it something as simple as a company profile, or as complicated as a book on world religion.

This market segment is still in its infancy, but it is certainly gathering momentum and set to sweep across America, Australia, and Britain into India. Yes, India is likely to be at the center of this media outsourcing stage, as it has been for other outsourcing market areas. Rosemary George, of Bangalore-based Flatworldsolutions notes:

Most of the work we are doing is for American and British clients and which deals with press release writing, making newsletters and article submissions. There is no dearth of skilled manpower in this area. India has a large pool of writers and the work today is being taken both by freelancers and specialised media companies.

As The Hindu reports, marketing of Indian entrepreneurs in this arena is going to be critical in taking this outsourcing business to the next level.

Mid pharma Outsourcing Pipeline

Mid pharma companies are expected to increase their reliance on products discovered outside the in-house pipeline over the next few years in an effort to boost revenues while reducing R&D costs. Mid pharma has traditionally relied less on externalization. It appears that outsourcing of products has become more prevalent in mid pharma. Experts believe that most of mid pharmas' growth will come from outsourced products. The main externalization strategy mid pharma companies will employ is in-licensing, which involves licensing the intellectual property rights to develop and market a product from another company in exchange for an up-front payment and milestones and royalties.

Read our previous post titled "Outsourcing Managed Security Services", which will give you more information about outsourcing.

Outsourcing Tips for Small Businesses

The promise of saving time and money by exploiting technology and inexpensive labor has driven companies to opt for outsourcing. Experts believe that millions of jobs will be outsourced to overseas destinations in near future. Before outsourcing your business, you must know the strengths and weaknesses of your business. Selecting a vendor is tough for large companies with huge budgets. You can browse through several websites to find a reliable partner. The following websites can be helpful on this regard:

Elance
iFreelance
ScriptLance
Rent A Coder
Get A Freelancer

Most companies get nearly 1000 new projects on their site every week. Before choosing a vendor, make sure that they sign a snag-proof contract. They must agree in writing on an arbiter before disagreements crop up. While drafting a contract, clarify not only the specific services you expect to receive, but also the quality of the delivery.

You can read our old post titled “Choosing the Right Time for IT Outsourcing” to know more about IT outsourcing.