Outsourcing

The Concept of Outsourcing
Outsourcing has received attention in the past few years with many different countries trying to get their share (Hadef & Partners, 2009). Outsourcing is defined as a cost effective strategy where the customer who could be a company contracts its non-core activities to another company that specializes in a specific niche (Hadef & Partners, 2009). The company being contracted is often referred
to as the service provider (Hadef & Partners, 2009). With the advancement in technology, outsourcing has evolved and is now being appreciated by most companies that have ditched the old in-house provision of activities to specialists (Hadef & Partners, 2009). Offshore outsourcing on the other hand refers to a business process outsourcing where the business activities such as IT are exported to other politically stable and developed countries where there are low labour costs and favorable taxes (Overby, 2013).
Prospects of Business Outsourcing to China versus India
China and other Asian countries have risen as the key destinations of offshore outsourcing. However, in the Asian context, China has been seen as a threat to India’s omnipotence in offshore outsourcing (Overby, 2010). There are comparisons that can be made. First off, India’s population stands at 1.17 billion while Chinas 1.3 billion. China resultantly have a larger labour force than India with only 4.3 unemployment compared to 10.7% of India.  China’s GDP is the third largest in the world while India’s the fifth. India is a leader in IT outsourcing compared to China with $70 billion versus $20 billion for China (Overby, 2010). The customer rationale also differ as proximity and co-location of manufacturing facilities make china preferable while language requirements and co-location with business process activities makes India a preference.
China additionally has cheap labour costs compared to India with reference to IT outsourcing salary (Overby, 2010). On the same stand China has high rates of wage inflation compared to the low wage inflation in India (Overby, 2010). India has better IT services especially in consultancy services compared to China as well.
The other core strength of India is the maturity of the management professional that manages projects compared to the missing links in middle and senior management in China (Overby, 2010). While china depends on both domestic and foreign companies, India solely depends on US. Lastly, in terms of outsourcing attractiveness, China is ranked at 5.61 compared to 7.12 (Outsource2india, 2015). Although there are differences that contrast the outsourcing industry, outsourcing to the East by the western based companies has developed at a greater rate (Overby, 2010). India has been preferred by most companies in terms of outsourcing destination.
UAE Outsourcing Development
In UAE the outsourcing market is slowly gaining momentum as the specializations and the economy also develop making it a preferred destination as well (Hadef & Partners, 2009). The market is so much expanded that some of the business process outsourcing services that are being offered have had to apply standardized operational models. Some of the services already in the UAE are the reasons companies should rethink of UAE as a destination (KPMG, 2015). First off, there is focus on core business activities. Secondly, there is the management of data and its associated use. Thirdly, the UAE companies especially KPMG provide timely management information systems (KPMG, 2015). The HR activities are streamlined with the financial aspects to make it easy to source for labor in the UAE (KPMG, 2015). Most service in the UAE are cost effective and assure investors or customers of continuity in service provision.

References
Hadef & Partners. (2009, October 5). Hadef & Partners - UAE LEGAL DEVELOPMENTS, NEWS AND ANALYSIS - OUTSOURCING IN THE UAE. Retrieved from http://www.hadefpartners.com/News/pageid/120-137/default.aspx?mediaid=89
KPMG. (2015). Business Process Outsourcing | KPMG | UAE. Retrieved from http://www.kpmg.com/ae/en/services/advisory/risk_consulting/bpo/pages/default.aspx
Outsource2india. (2015). A comparison of India with other outsourcing destinations. Retrieved from http://www.outsource2india.com/india/comparison-india-other-outsourcing-countries.asp
Overby, S. (2010, November 29). Offshore Outsourcing: 24 Ways to Compare India vs. China | CIO. Retrieved from http://www.cio.com/article/2413117/outsourcing/offshore-outsourcing--24-ways-to-compare-india-vs--china.html?page=2
Overby, S. (2013, September 12). China Struggling to Compete in the IT Outsourcing Arena | CIO. Retrieved from http://www.cio.com/article/2382530/legal/china-struggling-to-compete-in-the-it-outsourcing-arena.html