Outsourcing 2.0 – The New Way of Offshoring!

Offshore outsourcing has graduated from being an exceptional business plan to becoming a survival strategy to cut costs and enhance efficiency in the recession hit economy. And now the offshore outsourcing industry has entered the next level with Outsourcing 2.0.

What is Outsourcing 2.0?
The term, Outsourcing 2.0 was coined with an aim to make outsourcing deals sound more sleek and up-to-date with the present times. Also, this would attract attention of the media and venture capitalists. Here are some basic features of Outsourcing 2.0 concept:

It suggests the new ways of buying, selling and managing outsourcing relationships and stresses on the importance of collaboration, teamwork and effective communication among virtual teams which would in turn facilitate greater access to information.

It is about outsourcing to multiple vendors at the same time and informs about the importance of risk/reward sharing policy.

Instead of the traditional objectives like cost reduction and efficiency, outsourcing 2.0 focuses on value, effectiveness and innovation. This marks a shift from quantity to more knowledge based quality.

3 Principles of Outsourcing 2.0
Treating Offshoring as a Platform rather than a Delivery Channel

In the past, offshore outsourcing simply involved shifting the work to another location so that it can be processed more cheaply. However, outsourcing 2.0 focuses on generating value. In order to extract full value from the outsourcing relationship, you need to involve a lot of analysis, planning and management. And this can be done only when you shift your focus and treating offshore as a platform for offering.

Delivery Networks are syndicated on a Global Level
Till now, the delivery centers were more or less disconnected. As a result of which, it became almost impossible to engage multiple vendors on one particular work process. Moreover, balancing the resources across multiple centers was an additional challenge. It requires a high level of collaboration, integration and syndication across the various teams and locations so that they can work seamlessly on a single project and shift resources amongst themselves without any conflict. This is what outsourcing 2.0 makes possible. Remember, it is not about how many multiple centers you involve, rather it is about how well you collaborate and balance.

From Cost Reduction to Enhancing Value
If traditional outsourcing projects focused on reducing costs and enhancing the efficiency of work processes, then outsourcing 2.0 aims to generate value from the project. It is not about the number of people involved or their productivity measure, the record of errors and inefficiencies etc. anymore. Rather, outsourcing 2.0 is all about customer success. The service providers should seek to provide services that will ultimately generate business value for their clients and make their business more productive. Instead of just the work processes, it takes into account the bigger picture about how the processes will serve to achieve the main objectives of the clients' business.

Focus on Strengthening Relationships
Contracts and SLAs are important for the outsourcing project and make both parties tie up on a single list. However, what is more important than drafting contracts and thinking about penalty clauses, is to figure out ways to build a strong relationship between the client and the service provider. Contracts may be a great risk mitigation tool, however nothing supports you like a good client-vendor relationships in times of crisis.


Maneet Puri is the managing director of LeXolution IT Services, a reputed IT service firm located in India. He has over 10 years of experience in the offshore outsourcing industry and provides his clients with a range of Knowledge Process Outsourcing services like virtual assistance, internet research, Data Entry, Data Verification and so on.

2 Comment

  Wed, 18 November 2009  03:54:17
 Posted for: Web Design & Development

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Comment Post For Outsourcing 2.0 – The New Way Of Offshoring!

You are absolutely right! In fact KPOs and basically the entire Offshore Outsourcing Industry is being seen as the saviors of the recession hit economy!

 Tue, 20 April 2010
 Posted By: Maneet Puri

Very interesting discussion on the topic! Companies have been outsourcing heavily today, due to rising energy costs, lower marginal profits, and sluggish demand... Thanks to the help of KPO, everything needs seem to come out with solutions and services.

 Tue, 20 April 2010
 Posted By: KPO