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Industry : ITES / BPO / Customer Service Functional Area : Outsourcing
Activity:  5 comments  311 views  last activity : 01 25 2011 13:25:32 +0000
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This one is a classic! Last month, one of my team members hunted down a NY based client and sent an introductory mail to him. The very following day he received a requirement email for some J2ME based project that he wanted to outsource and wanted us to bid for it. While conversing with with my teammate and looking at the email, I was sure that this one was not even worth the shot... :)

Here is a view of the email:
" Hi Sri,

Here is a requirement that I would like you to bid on:
a) ..... (Specifications)
b) .....
c) ......

Please send any questions on email only though I think the above information is what you would need. I will be available to speak once we agree on a good price"

If this looks familiar and you are laughing at it, well, so am I.. :)

Though money was definitely one of the main reasons why outsourcing came into being, but strictly if that is your utmost priority then you really do not need an outsourcing company... My suggestion - hire a freelancer!

Now the big question, WHAT MAKES ME SAY SO?

If you have dealt with government agencies or say, if you have ever bid on tenders this would be quite easy. Whenever a company bids on a government tender, there are always two stages:
1) Technical Bid
2) Price Bid

Technical bid would always precede a price bid just for the fact that quality always comes first. No matter how cheap my services are, if I do not have the right skill to develop your product (or service), I ain't worth a cent! Henceforth, if you first shortlist your outsourcing vendors on price, I will not be surprised if you would later say - 'Burnt my hands and not doing it anymore'.

 Top Comment : Deepak Agrawal   | 09 10 2009 04:57:26 +0000
I don't think that price is the only reason to outsource, if this would have been the case then India would have not got so much outsouricing contract. India has received so much outsourcing contract because we have quality like good english communication , good education and quality manpower etc. I think there are lot of other cheaper countries like china who has mastry in provding cheap products but it can't provide quality which is the most important aspect of outsourcing. Yes quality can be compromised little bit on pricing but not to a great extent.
 
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5 comments on "Is money your only reason to outsource? If yes, should it be?"
  Commented by  S. Muralidharan, Head, Project Planning/Strategy, Knowledge Foundation    | 01 25 2011 13:25:32 +0000
Out of anxiety and desperation, many of our Indian corporates succumb to such projects in order to keep their flocks together and a client to get added to their profile!   You are talking about Government seeking Technical bid and Financial bid.  Majority of Government Tenders are prepared by the corporates who had been assured of the projects even before the proposal was out.  Majority of our Government projects were only an eye-wash to finish the formality!
I believe that Money is the backbone for any business. But as far as outsourcing is concerned it is giving an opportunity to small & mid level companies, maintaining business relationships etc......
  Commented by  Arun Pratap Singh, Sr. Consultant, Idea Connection Systems    | 01 25 2011 06:42:57 +0000
I believe moeny is one of the key priority of any business entity  but oursourceing is more to leverage the ourside market strength,strategic aliance and taking best from every one. its like i am good at production and you at supply chain and some one at distribution so I an outsource my supply  and distribution to others.. 
  Commented by  Ramdas Pawar, Sales/BD Manager, Flex    | 09 10 2009 07:15:13 +0000
For me, money is "One of the important factors". Not the only factor for Outsourcing. I would never go to Kuwait or any other middle eastern country no matter they will pay me more than that in India. The reasons why a man wants to go abroad is all the facilities  and opportunities he gets in those countries other than money.
  Commented by  Deepak Agrawal, Research Associate/Business Analyst, EDS    | 09 10 2009 04:57:26 +0000
Rating : +1 
I don't think that price is the only reason to outsource, if this would have been the case then India would have not got so much outsouricing contract. India has received so much outsourcing contract because we have quality like good english communication , good education and quality manpower etc. I think there are lot of other cheaper countries like china who has mastry in provding cheap products but it can't provide quality which is the most important aspect of outsourcing. Yes quality can be compromised little bit on pricing but not to a great extent.
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