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     Tuesday, April 15, 2008
    Tuesday, April 15, 2008 3:53:36 AM (Eastern Standard Time, UTC-05:00) ( )

    A recession in the US may now be real and official. But irrespective of the downturn, Indian tech enterprises have some reason to smile. A new breed of outsourcers are emerging in the US. who could offset some of the impact of the recession on their businesses.

    These are the thousands of small and medium enterprises that are increasingly waking up to cash in on the outsourcing 
    wave, a market opportunity explored by their big daddies for a couple of decades now.

    "SMEs, (small to medium sized enterprises),  in the US are under severe pressure to increase profitability and business margins. This will force them to outsource and even have M&A, (merger and acquisition), arrangements with Indian firms. India is going to be a great beneficiary of this trend. This will substantially offset or minimize the impact of the US recession on Indian industry," said Adam Larkey, partner at Wolet Capital Corporation, a New York-based investment banking firm.
    www.woletcapital.com

    By March 2008, India had received SME outsourcing deals worth $7 billion from the US as against $6.2 billion in the previous year. This is expected to be $8 billion by March 2009 and $11 billion by March 2010. The total outsourcing from the US by that time would be $54 billion.

    "Almost every Fortune 500 firm and other major companies already outsource to India. By mid this year, hundreds of small US firms are expected to evince interest in outsourcing engagements with Indian partners. It will gain momentum during 2009 while a quantum jump is expected from 2010 onwards," said Avinash Vashishtha, managing director, Tholons, an investment, advisory and research firm.


    Reference

    http://timesofindia.indiatimes.com/Small_US_firms_to_up_offshoring_to_India/articleshow/2949618.cms


     

    I know there are those who have had bad experiences with outsourcing. I’ve read horror stories in blogs and forums and I completely empathize with the narrators. Few people understand better than I do what a let down it is to go into a relationship with such high hopes only to be left feeling disappointed.

    There are two things I feel it is important to remember when considering negative experience posts about outsourcing.

    #1. Experience is what you get when you are expecting something else.

    #2. It takes at least two people to make a deal go bad.

    For the purposes of this blog, when it comes to discussion of the economy, I don’t see the issue of a recession as being the challenge for the seo community. I see the biggest issue the industry faces, (and the best argument for outsourcing), is the fact that the industry is an increasingly more difficult and more competitive environment of which to attempt to maintain profit margins in.

    It is taking more and more time, effort and resources almost daily to satisfy marketing objectives in this every expanding tech world. Each aspect of electronic  marketing takes a pretty hefty investment of educational capital. So when you consider having to be proficient in on site optimization, then off site, then analytics, then writing good copy, social media marketing, branding, conversions, PPC, pod casts, videos, mobile apps, etc. etc. etc. AND, online marketing is just now starting to come of age. It ain’t gonna get any easier kids.

    There is real money online and that brings real companies with real assets who don’t give a damn that you are just a 5 man company. They see your market share as theirs and they kind of have a point.

    So, you are left facing an ever dwindling list of choices.

    Specialize on just one or two aspects and become an expert at those.

     I believe this is the best option for most small SME's. Especially those not comfortable with the concept of outsourcing or expanding their labor force in-house.

    Allocate more of your time to read, study and learn to become good enough at more areas of online marketing to expand your offerings.

    The problem here is you have to keep spending the time you are spending now to maintain the level of profits you have PLUS spend more time on education. Doesn’t leave a lot of time for enjoying the fruits of your labors.  Puts a new spin on the old adage, "you can't take it with you".  Spending all your time working AND going to cyber school begs the question to be re-phrased to "why have it in the first place if you don't have time to spend it ?"

    Recruit, hire, train, supply and manage new employees.  

    The problem here is not in the hourly wage or salary with benefits. The problem here is the expense in time and capital. You have a sizeable investment for each aspect of this process and you have to cover the risk for quite some time before you can expect a reasonable return. Then if they have to be let go, they quit or they get stolen by a competitor with deeper pockets, you lose!

    There is no question that outsourcing can be a good solution to two of those problems that could limit growth. So, if you are considering outsourcing as an option, let me offer the benefit of my experience in the form of a couple of tips.

     

    It’s not about the cost, it is about the quality.

    There is nothing in this world that another can not produce cheaper with less quality. Those who consider price alone are this man’s legal prey.

    There are a lot of smart people in India working at running outsourcing and BPO companies. Smart you want. You want someone who has the resources to recruit, hire, train and most importantly, MONITOR FOR QUALITY CONTROL.

    No matter what you pay, if the quality is not there your profits will suffer. Value is the only commodity that will maintain profits. Quality is value whereas cheap is not. This is why I have never had any sympathy for those who buy 1000 links for $39 and then complain they got screwed.

     

    Know What You Want.

    If you could not hire a new person and provide a detailed job description, then you are likely going to be disappointed in your outsourcing company. They can not read your mind and can only provide what they understand you want.

    In spite of popular misconception, India is not a country full of people who set up companies just to rip you off. The vast majority of outsourcing, BPO and KPO, (knowledge process outsourcing), are hard-working, honest businessmen who want nothing more than to provide you with the kind of service that keeps your business coming to them. They WANT to do a good job and will as long as you define what that job is.

     

    Communication and Patience is the Key

    If you can write a job description that a new hire could effectively execute, then you can find an outsourcing company that will do the same. The trick is in being able to communicate exactly what it is you want and if you are not getting what you want then accept that not only have THEY failed to provide what you were looking for, but also YOU failed to effectively communicate what you were wanting.

    There are a lot of very well educated people in India and educated people speak and write English. However it is still a second language to them and there is also the issue of accents and culture. BUT in my experience it is not that different than hiring people in America.

    I have had a lot of difficulties over the years with getting poor performance out of employees and blaming myself for not being clear as to what I had expected of them. That is certainly a problem because I always seem to have 15 things on my mind at any given time.

    But I don’t have nearly as much of a problem with performance from employees here yet I explain myself in pretty much the same way as I always have. What is the difference?

    Then difference is that even though English is a second language, they listen because they WANT to understand and perform above my expectations. That is a part of the culture here. Doing a good job is an honor and to do poorly reflects badly not only on you but on your family as well.

    In India, the majority of people who have a college degree got that degree through the sacrifices made by their parents and family. Often those sacrifices can be extreme. To earn a degree and then perform poorly is a kind of slap in the face to all the people who worked very hard to give you the opportunity in the first place.

    Of course there are exception and people are people all over the world. But the point is simply that if you know what you want and can communicate that honestly and clearly you can expect to get quality results.

    There are a LOT of good reasons that most of the largest corporations on the planet use outsourcing to grow their business, and so can you by using outsourcing as a way to keep up with the ever changing face of online marketing.

    SME's are now in a position to capitalize on the same things the big boys have been getting for a long time now. And that thing is not just cost savings. It is quality that can only be gained by recruiting, training and managing smart people who can produce superior results.


     


     

    Peace Y’all

    G

     

    It seems we’re all so busy trying to give our kids all the things we DIDN’T have that we forget to give them the things we did.

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