To outsource or Not to outsource…. that is the question….


We are in a world today where we need to find the cheapest way to operate, for several years various industries operations have been pushed out to poverty stricken countries where labour is cheap, a raise in call centre operators became the vein of all of our lives when the operators accents made it difficult to understand what they said and equally our accents and speed of speaking made them ask us to repeat ourselves continually.

First we saw places within the European area like Poland and Romania as the choice of our outsourcing operations, but this slowly moved eastwards towards India. Now pre-media operations have been dabbling with outsourcing for a few years; they can get pre-media a real bargain price of between 10euro to 20euro an hour and a limitless number of staff to deal with whatever load is sent to them.

Now this must be good surely, cheap hourly rate and limitless staff and no HR issues for us to deal with….. You would think that all companies, I mean any company that doesn’t need creative people and are preparing files for whatever output channel would jump at this, yet we only see a minority do so. Some companies have setup their own business units there and in source their work to maintain control, but does this work…?

Here in the UK we use various methods of server hardware to improve our workflows to provide business value to our clients, this all has a cost and one that still needs to be calculated into any outsourcing hourly rate….  Unfortunately we have see so many companies wow’d by that 20euro an hour rate over the 75euro for their own studio failing to remember that their own studio’s rate includes all the technology and administration staff plus premises to run the operation, do they add those same costs into the calculations for their outsource partner?

I have witnessed a company that setup a team to handle the work sent to the outsource partner, where this team acted as traffickers and quality control, salaries in excess of 300k euro, this dedicated team wasn’t even added to that outsource hourly rate…!

Other companies I have spoken too have tried and decided that the quality and turnaround was not worth jeopardising their client for, and therefore stopped to find more efficient ways to source in the UK, they also found that although their hourly rate was better it would take 2 or 3 attempts to get the artwork correct, and this was without the time to transport the files back and forward across the slow communications links.

The Future

As the cost of communication is lowered and the infrastructure for these countries is improved the time to move our data around will decrease, we all know though that the volume of our data seems to be ever increasing, so will we be any better of?

Inevitably the cost of outsourcing to these locations will be increased as their economic climates become more expensive, so what happens when todays current oursource preference is shifted, what country will be next? China? Eastern Russia? Japan?

Author: Gary George

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