The Falling US Dollar and its Impact On Outsourcing

Until recently various Philippines companies are scurrying to find clients in Europe following the downward trend of the U.S. dollars in the global market. Following the same track are some of the countries which have made huge investments and heavily rely on outsourcing as a means of livelihood for their people.

India and Philippines plus other major outsourcing countries area welcome victim in the downward spiral the U.S. dollar is heading to. There is no doubt that cost-cutting may happen as well as a decrease of profit-margin in the different sectors of Business Process Outsourcing (BPO) companies.

Critics are may be on the right track by saying and predicting the European Market as a significantly larger than that In the U.S. and is increasingly growing real fast.

As these outsourcing countries are looking for new ways and alternative ideas to ameliorate their disposition there is no denying that with the weakening dollar the U.S. can be a competition if they accept outsourcing projects from Europe themselves having the advantage of language and culture thereof the east would have to contend with a more serious form of competition - that is culture wise.

According to sources a huge percentage of European companies outsource most of their IT requirements and financial services . The Philippines was voted last year as "The Best Offshoring Destination" by the UK's outsourcing Market. It could be a win-win situation for the Philippines if they get the whole European Market, but as for now outsourcing countries would have to look out for the U.S. dollars' steady downhill roll.

Companies that traditionally rely on India for offshore IT services have been looking for that something new beyond India, the reason been high employee turnover and unreliable communications. But the search is taking a new turn recently, particularly for the U.S. companies, as a weakening dollar has boosted the cost of IT services priced in India's rupee. Over the past five years the dollar has declined about 16% against the rupee. High real estate costs and expectations for tax increases also have diminished India's allure.

As outsourcing to India becomes more expensive, the outsourcing countries in US might opt for destinations nearby, keeping work in the Western Hemisphere, where they can operate within their time zones. In the past years a company could save 40% to 50% by hiring Indian firms to handle IT and other services, however should the U.S. dollar continue its descent, that differential would shrink to 10% to 20%, he estimates. "If you're only going to have a 20% savings, clients start to think about time zone.

How much longer the world's companies will have financial incentive to outsource to India is a matter of lively debate. They are numerous challenges, such as increasing staffing costs, turnover and strained infrastructure and the most recent, the falling US dollar and expected tax revisions that may increase the cost of relying on outsourcing providers....continued

More on scope of outsourcing at www.outsourcingstrategies.com

Also any kind of outsourcing information, outsourcing news, HR outsourcing services, outsourcing events, IT Outsourcing, outsourcing software development,outsourcing forum, directory of whitepapers, Business Listings, RFP directory,outsourcing articles,outsourcing openwiki and outsourcing solutions.Check out OutsourcingStrategies .

http://www.pr-usa.net/index.php?option=com_content&task=view&id

Business Financial Services

The Falling US Dollar and its Impact On Outsourcing