Gauteng Business News

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OUTSOURCING: Local Company Provides Outsourcing Services in India


Recent Gauteng Business News

The idea of outsourcing is rooted in the competitive advantage theory propagated by Adam Smith in his book The Wealth of Nations, which was published in 1776. Over the years, the meaning of the term "outsourcing" has undergone many changes, and what started off as the shifting of manufacturing to countries providing cheap labour during the Industrial Revolution, has taken on a new connotation in today's scenario.

In this day and age, where IT has become the backbone of businesses worldwide, outsourcing has become big business, with countries like China, India and the Phillipines becoming international outsourcing hubs. However, this global business trend is often seen as providing lower-quality service, or even as running sweat shops in low-cost countries and exploiting labour in these countries to reap maximum profit from the poor workers. In fact, the reality is markedly different, says Gerald Naidoo, CEO of Logikal Consulting, with offshoring providing benefits to both the outsourcing company and the service provider, as well as its employees.

The Importance of Outsourcing Solutions

“In order to be competitive globally these days, businesses have to look at offshoring. The outsourcer reduces costs and increases quality in non-core areas of business and utilises his expertise and competencies to the maximum, since the service companies provide services at lower prices than the client companies can do the work in-house,” Naidoo explains.
During the course of its operations in India, which boasts a number of branches for the home-grown Logikal Consulting, the company has established a unique environment. One which it is now going to use to its full potential by offering outsourced solutions to its customers across Africa.

“Very few systems integration firms are Africa focused, and we decided to leverage our expertise in providing this much-needed service,” Naidoo says. “We offer state-of-the-art security and specialised proficiency with products like SAP and Oracle. We will therefore be offering SAP testing, in addition to standard systems integration, as well as Oracle infrastructure services.”
He adds that the solution will be combined with the onsite service Logikal Consulting’s customers have come to expect, providing for knowledge transfer, particularly within the SAP environment. “The quality of service we offer is excellent, and we have attracted senior executives from US and Indian multinationals in order to ensure our clients only receive the very best solutions.”
As a local company with an international footprint, Logikal Consulting’s offering will be of particular interest to South African businesses looking to outsource. “If a company is already looking at going offshore, why not look at a South African business‘” Naidoo asks. “By dealing with a local business, customers can be assured of the fact that there will be no impact from a culture or language point of view, as well as the highest levels of service.”

Could You Lose Your Job to Outsourcing‘

While this will provide the answer many South African businesses have been looking for, there are those that see offshoring as job removal rather than the vital cost-saving service it is. According to Naidoo, offshoring is neither the cure-all it has been portrayed by business nor the economy-destroying monster people claim.

“Offshoring is not necessarily a panacea for all of a company's cost issues and strategies. It boils down to whether it aligns with the company's business objectives and meeting their customers' needs. It also depends on whether companies are ready to take on offshoring as part of their operating model,” he says. “In addition, the debate about jobs has been vastly overblown In the US – one of the largest outsourcers in the world – the ‘mass layoffs’ claimed to outsourcing were only 4% in reality.”

He adds that although offshoring does eliminate certain jobs, it also yields important benefits to the economy by encouraging a more sophisticated infrastructure setup. “In order to achieve the desired results and benefits from outsourcing, companies will still require an educated local team to manage the project. Outsourcing makes good business sense. Specialised companies provide their outsourcing services at costs that improve the client’s bottom line, so both companies, the service provider and the client, profit from the arrangement.”

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