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outsourcing onshore or offshore (top reasons 2004 world summit (access to…
outsourcing onshore or offshore
cost is key (but not the only) driver in decision to outsource
top reasons 2004 world summit
access to skills
grow revenue
increase variable cost element
improve quality
improve focus
conserve capital
reduce costs (49% of responses)
innovate
cost reducing necessary for other reasons also
growth
technology
growing economies
globalisation
increased skills in developing countries
risks
distance
transport costs
increased time in supply chain
access problems
control
communication (time zones)
legal system
government interferance
taxation
licenses
visas
intellectual property rights issues
bureaucracy for exports
currency
exchange rates moving
setting pricing in local currency
quality and reliability
availability, skills and education of workforce
infrastructure of company
additional QC costs
language and culture
translators cost extra and slow things down
enforceability of contracts vary
avoiding countries with bribery culture
political and economical instability
disruption to supply chain if change of regime
out of control inflation
security of visiting businessmen
damage
sweatshops
working conditions
child labour
length of working week
consumers and shareholders have issue with
assessment
some prefer nearshoring
inadvisable to chose purely based on cost
consider popular destinations for particular fields
assess savings alongside risks