offshoring to further capitalize on the geographic traits of labor arbitrage and time zones. India, China, Philippines became hot destinations for offshoring.

Outsourcing is the migration of process or processes to an external entity which excels in performing that process. Offshoring refers to migrating the process to another country taking advantage of lower-cost labor. Offshore outsourcing encompasses manufacturing, IT, and back-office services. GE has been instrumental in success of outsourcing and offs

Future of business is very intricate with shorter life of any business model. Last three decades have observed the shriveling life cycle of products. The reason certainly is the competition. The appetite for larger market share has resulted in continuous innovation on both business model and its offerings. This century has seen the transitioning of supply oriented to demand intensive business model. Over the last two decades cost has been very critical driver of business, negative pressure of cost has been active topic of discussion for modern management thinkers and executives. The first wave in this direction was through implementing rationalized processes.

Next wave indeed has been integrating quality tools and scales to the processes. Deming’s PDCA cycle, Juran’s Quality trilogy, Feigenbaum’s total quality control, Dr Kaoru Ishikawa’s tool kit, Shigeo Shingo’s Just in Time, Philip Crosby’s zero defect, has been effectual contributions towards process excellence.

General Electric, one of the most successful companies implementing Six Sigma (quality tool), has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. General Electric’s revenue soared by 11%, profits by 13% and operating margins increased by 17% during 1996-1998.

The Process automation and information technology became the core to any business strategy; last two decades of the last century saw significant development in field of IT. Automating and integrating processes indeed changed the way business was done. Most of the management principles related to cost advantage has been process driven. Last decade was the metamorphosis of the cost advantage theory, paradigm shift from process to people has successfully evolved most controversial management tool called “Outsourcing”. The theory to attain cost advantage through low cost labor and concentrate on core competency became the drivers of outsourcing. Outsourcing involved into offshoring to further capitalize on the geographic traits of labor arbitrage and time zones. India, China, Philippines became hot destinations for offshoring.

Outsourcing is the migration of process or processes to an external entity which excels in performing that process. Offshoring refers to migrating the process to another country taking advantage of lower-cost labor. Offshore outsourcing encompasses manufacturing, IT, and back-office services. GE has been instrumental in success of outsourcing and offsh

topic of discussion for modern management thinkers and executives. The first wave in this direction was through implementing rationalized processes.

Next wave indeed has been integrating quality tools and scales to the processes. Deming’s PDCA cycle, Juran’s Quality trilogy, Feigenbaum’s total quality control, Dr Kaoru Ishikawa’s tool kit, Shigeo Shingo’s Just in Time, Philip Crosby’s zero defect, has been effectual contributions towards process excellence.

General Electric, one of the most successful companies implementing Six Sigma (quality tool), has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. General Electric’s revenue soared by 11%, profits by 13% and operating margins increased by 17% during 1996-1998.

The Process automation and information technology became the core to any business strategy; last two decades of the last century saw significant development in field of IT. Automating and integrating processes indeed changed the way business was done. Most of the management principles related to cost advantage has been process driven. Last decade was the metamorphosis of the cost advantage theory, paradigm shift from process to people has successfully evolved most controversial management tool called “Outsourcing”. The theory to attain cost advantage through low cost labor and concentrate on core competency became the drivers of outsourcing. Outsourcing involved into offshoring to further capitalize on the geographic traits of labor arbitrage and time zones. India, China, Philippines became hot destinations for offshoring.

Outsourcing is the migration of process or processes to an external entity which excels in performing that process. Offshoring refers to migrating the process to another country taking advantage of lower-cost labor. Offshore outsourcing encompasses manufacturing, IT, and back-office services. GE has been instrumental in success of outsourcing and offs

companies implementing Six Sigma (quality tool), has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. General Electric’s revenue soared by 11%, profits by 13% and operating margins increased by 17% during 1996-1998.

The Process automation and information technology became the core to any business strategy; last two decades of the last century saw significant development in field of IT. Automating and integrating processes indeed changed the way business was done. Most of the management principles related to cost advantage has been process driven. Last decade was the metamorphosis of the cost advantage theory, paradigm shift from process to people has successfully evolved most controversial management tool called “Outsourcing”. The theory to attain cost advantage through low cost labor and concentrate on core competency became the drivers of outsourcing. Outsourcing involved into offshoring to further capitalize on the geographic traits of labor arbitrage and time zones. India, China, Philippines became hot destinations for offshoring.

Outsourcing is the migration of process or processes to an external entity which excels in performing that process. Offshoring refers to migrating the process to another country taking advantage of lower-cost labor. Offshore outsourcing encompasses manufacturing, IT, and back-office services. GE has been instrumental in success of outsourcing and offs

in field of IT. Automating and integrating processes indeed changed the way business was done. Most of the management principles related to cost advantage has been process driven. Last decade was the metamorphosis of the cost advantage theory, paradigm shift from process to people has successfully evolved most controversial management tool called “Outsourcing”. The theory to attain cost advantage through low cost labor and concentrate on core competency became the drivers of outsourcing. Outsourcing involved into offshoring to further capitalize on the geographic traits of labor arbitrage and time zones. India, China, Philippines became hot destinations for offshoring.

Outsourcing is the migration of process or processes to an external entity which excels in performing that process. Offshoring refers to migrating the process to another country taking advantage of lower-cost labor. Offshore outsourcing encompasses manufacturing, IT, and back-office services. GE has been instrumental in success of outsourcing and offs

offshoring to further capitalize on the geographic traits of labor arbitrage and time zones. India, China, Philippines became hot destinations for offshoring.

Outsourcing is the migration of process or processes to an external entity which excels in performing that process. Offshoring refers to migrating the process to another country taking advantage of lower-cost labor. Offshore outsourcing encompasses manufacturing, IT, and back-office services. GE has been instrumental in success of outsourcing and offshoring. In the early 1990s, Jack Welch, the former CEO of GE, introduced a new rule that governed GE's offshore actions. It is called the 70:70:70 rule. In an e-mail to GE employees, Welch mandated that 70% of GE's work would be outsourced. Out of this, 70% of that work would be completed from offshore development centers. And out of this, about 70% would be sent to India. This comes out to about 30% of GE's work being outsourced to India. Recent market surveys show that almost 80 percent of companies expect to increase their investment in outsourcing both IT operations and business processes. As every business has its risks, outsourcing has its share too.

One of the most critical risks is the failure to deliver apart from Data security, cost advantage and knowledge transfer. The success of the outsourcing project depends upon the vendor that you select. Vendor evaluation should be done in a very scientific and methodological manner. Equally important is the selection of geography.

• Evaluate the vendor country:

Analyze the political, cultural and economic climate of the vendor country. Look at the future of offshore outsourcing in the country where the offshore unit is located. One should refer federal regulations and the stability of economic policies. One of the critical aspects which we forget in evaluating the geography is evaluation of its higher education framework and supply of skilled labor. Infrastructure especially in terms of communication is very important.

• SWOT and Competitive analysis:

A detailed analysis of labor skill sets, technology infrastructure, data security, quality control processes, Intellectual property and other systems as per your requirements. Factors like Business Continuity planning and redundancy plans of the vendor are critical for your business continuity. At this stage do visit the potential vendor, and verify the credentials. A vendor check list should always be prepared and the entire vendor should be rated on the common requirements scale. The scalability of the vendor b