In order to be more competitive, the market pressures are looming at every corner of the globe and corporate executives are doing whatever they can to bring down cost. Before the economic slowdown, the companies used to send non-core work to low-cost countries. As the state of the economies worsen, firms started to see offshore outsourcing in a different perspective. A growing number of companies are sending core business operations overseas. To build 23 percent of the cars it sells in the US to low cost countries. From the current statistics of 15 percent. The technology firm international Business Machines Corporation also plans to boost its offshoring activities. The following month, the IBM issued a press release announcing that it had renewed and extended its EUR 3.2 million outsourcing contracts with Amway GmbH. In their business strategies, the firms have started to incorporate outsourcing. The publicly traded companies experienced a surge in a key financial indicators whenever they publicize plans of the outsourcing business operations or functions.
The wall street journal reported that Sprint Nextel Corporation is in the final discussion to the outsource management of its cellular network to Telefon AB LM, it is a move that would transfer 5,000 to 7,000 US jobs to the equipment vendor. By sending shares of the Sprint up sharply. The Intel Corporation will be closing some assembly and testing plants that are not cost efficient and it will outsource its Southbridge chips to Taiwan based advanced Semi conductor Engineering Inc. The Intel predicts the deal will increase its operating revenue by 40 percent in the second quarter of the year 2009 compared to its previous quarter. As more and more companies move work overseas, the offshore service providers are rushing to get a chunk from the incoming opportunities. The Dallas based affiliated computer services wants one half of its workforce in the offshore locations in an effort to keep up with rivals such as Wipro Ltd., TCS and Infosys. In the last quarter of 2008, ACS announced its p0lan to move a higher-level IT jobs offshore.
The ACS has an estimated 63,000 workforce where 20,000 or about 32 percent are in offshore locations, the company still has about the same percentage of the workforce in the offhore centers in China, Malaysia, India and the Philippines but in a greater numbers. A 50-50 split in the local and offshore operations is an aggressive strategy by ACS as US announced just last week that the President plans ti end tax breaks to firms shifting jobs overseas.
REFERENCE:
http://www.blog.infinit-o.com/outsourcing-business-strategy/
