Evaluate the costs and benefits for UK fashion retailers of sourcing products from India

Outsourcing your company abroad involves buying in from another business inputs that were previously created in the firm. It is integral for both cutting costs and benefiting from high quality products as well as gaining from specialisation.

Outsourcing part of your business opens up a world of opportunities such as the ability to maximize your revenue and minimize your expenses, the access to specialized skills and services, the prospect to concentrate more on your core business and to therefore save on money, time and infrastructure.

Outsourcing to countries such as India can give you access to cost-effective services. The same services with the same level of quality are offered in India for a much lower cost! In the UK the labour cost for manufacturing clothes are extortionate due to government legislations such as the minimum wage and taxes etc, and by outsourcing to India you can help you save up to 60% of your total costs when outsourced! Outsourcing enables you gain access to high-quality services at a cost-effective price.

Another benefit of outsourcing is that you can save on every aspect of your business and increase your profits. When you outsource, you can save on time, effort, infrastructure and manpower. Since you don't have to invest in infrastructure, you can also save on making unnecessary fixed investments. This is due to the trouble of changing or maintaining infrastructure being irrelevant. You can also save on capital expenditure by being able to save on training costs, because you do not have to invest in human labour. All of which leading to an inevitable increase in revenue.

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By outsourcing the manufacturing stage of production to India you can get expert and skilled services allowing the firm to concentrate on core capabilities the stage of the production that is outsources would not be the core competency but the firms outsourcing partner would be specialized in that particular business process. India offers cost-effective services. Outsourcing to India can help a firm save more than half of there operating costs! India has a large, educated, trained and technically skilled manpower and this number only keeps growing every year as well as having the largest English-speaking audience after the U.S. Unlike the west, where technical talent is rare, India has a large pool of highly-skilled professionals. Having a large technically skilled manpower has enabled India to provide cost-effective services without compromising on quality. By outsourcing business processes to India a firm is enabled to broaden its skills and expertise across industries and technologies to achieve greater efficiency and quality levels in the outsourced process. The organization will be free to concentrate on your core business a firms employees can be put to better use prompting a huge growth in your core business.

In the UK, India has a unique benefit where India’s day is our night this will allow the outsourcing partner to complete critical work and send it the firm the next day. This enables the work to be completed much faster and gives your business a competitive advantage.

The overall efficiency will be greatly increase by outsourcing as the non-core business functions will be performed efficiently by the outsourcing partner, while core functions can be efficiently carried out in-house. Thereby overall efficiency and increases in your profits can be achieved.

Outsourcing can help an organization gain a competitive edge in the market with access to specialized services for different business processes a firm is thereby providing customers with best possible services.

India uses the latest in software, technology and infrastructure to provide global customers with high-quality outsourcing solutions. India has proved that it is technically superior when compared to other countries that provide outsourcing solutions. So, when companies outsource work to India, they can be assured that the best technology and software would be used for your services.

India has been a pioneer in providing outsourcing solutions and has been providing a range of outsourcing services to countries across the globe. Outsourcing to India can help your organization benefit from cost-effective services, high-quality services, reduced operating costs, greater flexibility and faster-time-to-market amongst others. These are just a few reasons why companies outsource to India. Another reason why outsourcing to India makes good business sense is because India has ‘high-end technology’ and ‘best-of-breed’ infrastructure. India has now become the world’s most preferred outsourcing location.

However even with this array of benefits there are hidden costs that any firm must consider before deciding to outsource to India. There can be several disadvantages in outsourcing, such as, renewing contracts, misunderstanding of the contract, lack of communication, poor quality and delayed services amongst others.

Disadvantages of outsourcing may also be that at times, it is more cost-effective to conduct a particular business process, rather than outsourcing. Also while outsourcing services such as payroll processing services and tax preparation services, your outsourcing provider will be able to see your company’s confidential information and hence there is a threat to security and confidentiality in outsourcing.

Outsourcing, though cost-effective, might have hidden costs as well, such as the legal costs incurred while signing a contract between companies. You might also have to spend a lot of time and effort in getting the contract signed.
The disadvantages of outsourcing lead organizations to think about what they are stepping into. However the disadvantages of outsourcing are less than the advantages of offshore outsourcing and in some cases none of the disadvantages would be encountered at all with a reliable outsourcing partner. The opportunities created by outsourcing are immense and seems to be a very valuable investment with a exceptionally promising future.

Bethany Brandon-Blatch