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Outsourcing for Small Businesses

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What are the realities of outsourcing for small businesses? EcommerceTimes.com Viewpoint columnist Christopher Kenton discovered a few during a nine-month exposure to overseas outsourcing, as he recounts in "The Changing Face of Offshore Programming". Kenton spent the months outsourcing on a per-project basis and was interested discovering what cost benefits he might experience in doing so. What he discovered, however, was that in a few areas hidden costs added up quickly.

* Project management -- Sending work to overseas programmers is easy, but who manages the project? The quality assurance? The contracts? It turns out Kenton did, which added significantly to the bottom-line cost of outsourcing his projects.

* Intellectual property -- As Kenton puts it, "A contract is only as strong as your ability to enforce it." Are you willing, and financially able, to fight an international legal battle?

* Wages -- It's not a hidden cost, but as outsourcing becomes increasingly popular, international hourly wages are going up. Kenton discovered that 60% of the work he planned to outsource overseas ended up remaining stateside for this reason.

In the end, Kenton concluded that despite its advantages and disadvantages, outsourcing will eventually become less of an issue as the labor markets equalize.

Last updated: Jan 13, 2004




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