Comments on: Carl Chinoy: FIVE Absolutes to Consider when Outsourcing http://thriveamerica.com/video/chinoy Helping you thive in this economy and beyond! Sat, 03 Jul 2010 15:25:58 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Carl Chinoy http://thriveamerica.com/video/chinoy/comment-page-1#comment-303 Carl Chinoy Tue, 11 Aug 2009 16:39:33 +0000 http://thriveamerica.com/?p=1837#comment-303 Todd: You are bringing up an excellent point on Opportunity Costs and how it will effect the cost decision. I have seen many organizations gaining significant benefits when their resoruces that were performing the non-core but essential tasks which now is being handled by an Outsourcer. Due to an Outsourcing relationship the client resources are now focusing on the CORE business, building upon tangible Value Added or tasks which will differentiate their orgnization from the competition activities while the Outsorucer manages the essential activities at a substantial cost differential freeing up investment capital for the organization. When you look at countries and their focus, you will see that various regions or countries are specifically investing in certain industries and providing incentives to enterpreneurs and organization to start businesses in certain industries or competencies. Thes countries have built that particular focus and capability and want to utilize that capital in a specific method. E.g. India focused on Industrilization and developing an english speaking population more then 50 years back. There was a specific effort from the government then (after independence in 1947) where they modeled the Indian Institute of Technology (IITs) all around the country. These institutions were started with a certain purpose, to boost Industrilization and the medium of education was English. This built a large pool of english speaking world class engineers and became a catalyst to the society overall to focus on engineering and the science faculty in particular. This focus has helped in building s very strong multi-billion dollar Outsourcing industry which is serving the global community today. Yout point is excellent! Thank You. Todd: You are bringing up an excellent point on Opportunity Costs and how it will effect the cost decision. I have seen many organizations gaining significant benefits when their resoruces that were performing the non-core but essential tasks which now is being handled by an Outsourcer. Due to an Outsourcing relationship the client resources are now focusing on the CORE business, building upon tangible Value Added or tasks which will differentiate their orgnization from the competition activities while the Outsorucer manages the essential activities at a substantial cost differential freeing up investment capital for the organization.

When you look at countries and their focus, you will see that various regions or countries are specifically investing in certain industries and providing incentives to enterpreneurs and organization to start businesses in certain industries or competencies. Thes countries have built that particular focus and capability and want to utilize that capital in a specific method. E.g. India focused on Industrilization and developing an english speaking population more then 50 years back. There was a specific effort from the government then (after independence in 1947) where they modeled the Indian Institute of Technology (IITs) all around the country. These institutions were started with a certain purpose, to boost Industrilization and the medium of education was English. This built a large pool of english speaking world class engineers and became a catalyst to the society overall to focus on engineering and the science faculty in particular. This focus has helped in building s very strong multi-billion dollar Outsourcing industry which is serving the global community today.

Yout point is excellent! Thank You.

]]> By: Todd Youngblood http://thriveamerica.com/video/chinoy/comment-page-1#comment-299 Todd Youngblood Mon, 10 Aug 2009 17:34:52 +0000 http://thriveamerica.com/?p=1837#comment-299 The economic “Law of Comparative Advantage" can be applied to demonstrate that outsourcing can ALWAYS generate value for both parties. This is true even when the buyer of outsourcing services is better and more efficient than the provider at executing the process in question. Yes, it's a very counter-intuitive concept. It is also a critical one for both buyers and sellers of outsoucing services to understand. See http://en.wikipedia.org/wiki/Comparative_advantage for an excellent review of Comparative Advantage. Example 2 on the referenced page is particularly helpful. The economic “Law of Comparative Advantage” can be applied to demonstrate that outsourcing can ALWAYS generate value for both parties. This is true even when the buyer of outsourcing services is better and more efficient than the provider at executing the process in question.

Yes, it’s a very counter-intuitive concept. It is also a critical one for both buyers and sellers of outsoucing services to understand.

See http://en.wikipedia.org/wiki/Comparative_advantage for an excellent review of Comparative Advantage. Example 2 on the referenced page is particularly helpful.

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