Obama Wants to Stop Outsourcing. Should You?


In his latest State of the Union Address, the US president intends to bring back jobs in the US by rewarding businesses with tax breaks. Should Aussie SMEs take the US as a warning sign and drop the ball on their outsourcing engagements?

Australian SMEs Benefit from Offshore Outsourcing


Small (0-19 employees) to medium (20-199) enterprises (SMEs) dominate the Australian market.

According to the report released by the Australian Bureau of Statistics last May 2013, 96 per cent of Australia businesses in June 2012 were small businesses. This figure has been constant since June 2011. The 2012 edition of Australian Small Business – Key Statistics and Analysis Report show that 95.9 per cent are small businesses, 3.8 per cent are medium businesses, and only .3 per cent are large businesses.

Like any small business in other markets, these firms need make the best out of their limited resources. They have to find the right processes and skills, regardless of location. Australian SMEs have been outsourcing despite all the negative hype brought by the election and many have been thriving.

Australian SME Productivity Survey 2012
Click bottom left portion to view whole survey findings

Australian SMEs are offshoring to augment their internal efforts not just to drive down costs.

Pure Economics 


One of the common arguments used against outsourcing is that it's not patriotic. Are the Apple products assembled in China un-American? Are the Japanese branded cars manufactured in America un-Japanese?

It's all about efficiency, flexibility and economies of scale for a sustainable business growth. 

You're a tech founder who's mulling over which to prioritise - feature development or bug fixes. Burden your team or outsource software development? 

You're a mom and pop business who wants to start a website because that's what everyone is into. Sign-up for a cheap web package or outsource web design?

You're a micro-business entrepreneur who needs to balance work with family life. Buy new equipment for a new assistant or hire a virtual assistant?

Offshore outsourcing provides a variety of practical staff leasing options when used with the right intentions.

Outsourcing Lessons Learned


True, offshore outsourcing has been widely used as a cost reduction tactic. US companies have been using it since the '80s to drive down costs. And that is the problem.

Researchers at the University of Tennessee studied a variety of traditional deals and found crippling outsourcing mistakes that still happen today. Many businesses are now learning from these mistakes post-recession.

Like what smart Aussie SMEs have already done, outsourcing is now being utilised as an operational strategy. Clients are outsourcing for best-in-breed processes through multi-sourcing to partner up with specialist service providers. Adoption of global business services - combination of outsourcing, manpower, and shared services - is also increasing.

Balancing Profit with Social Responsibility 


From a business perspective, offshore outsourcing is practical for SMEs. It presents new opportunities for large businesses to top into emerging markets. So what about the average working class Joe?

The key is balance. Prohibiting businesses from leveraging cost-efficient options will send them completely overseas. On the other hand, businesses also have a responsibility to their community.

So no, you shouldn't stop outsourcing. Utilise it for strategic value not just profit.

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