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.