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Saturday, April 10, 2010

Top 100 Freelance Blog Sites

LanceEarner

We’ve scoured the internet for the 100 best blogs for freelancers, and we think you’ll appreciate the results. There’s something here for every remote worker, whether you specialize in animation, software development, or anything in between. We divided the blogs into categories. (When in doubt, we deferred to the categories covered in each blog’s archives.) Enjoy!

TOP FREELANCING BLOGS:

  1. Freelance Switch This extremely popular blog–over 35,000 subscribers and multiple writers–includes advice, news and opinions for freelance workers, such as this insightful post on nurturing relationships with clients you’d like to keep. Also on Freelance Switch: forums and podcasts.
  2. Freelance Folder This site has a much-loved blog (almost 12,000 subscribers) in addition to its forums. The blog has over 20 contributors and contains useful posts like this one: “Why a Blog Is Important to Your Freelance Business.”
  3. Guerilla Freelancing Someone “from the trenches”–aka Mike Smith–offers up great resources and helps for freelancers, even as he tells it like it is with this post: “15 Drawbacks to Working Freelance.”
  4. Escape from Corporate America Career coach Pamela Skillings dishes work-at-home advice for freelancers, and even the occasional rant, like this one: “I Miss Sick Days.”
  5. Web Worker Daily Blog of wisdom from multiple writers for those who utilize the internet for work from home. A must-read: “Office Space? Mind Space!”
  6. Freelancing Blog This blog contains tips on working freelance (from proofreading to web design) from a team of writers. Among the best posts: “The Ethical Freelancer.”
  7. Artic Llama Blog The goal of this blog is to build bridges between freelance workers and those who hire them, but some of the best posts are those like this one, advocating working on your laptop at a coffee shop.
  8. Seth Godin’s Blog This one–with great stuff for freelancers, like this post about your profile picture–seems to make every blog list on the net. As for who he is? The only thing certain is that he’s the author of a lot of books, like The Purple Cow.
  9. Roberto Alamos Freelance and business (on the internet) advice from Roberto Alamos, including “10 Tips for Effective Freelancing.”
  10. Podcast for Freelancers Despite the name … it’s also an advice-heavy blog, with posts like “Procrastination: You Can Overcome It.”
  11. The Berkun Blog This Scott Berkun is a real hot shot hero to the technically inclinced, but check out the archived blog entries–there’s stuff here for nearly every creatives freelancer, especially this lesson from a Dr. Seuss book.
  12. Essential Keystrokes Though it’s written by a web designer, there is something on this blog for every freelancer, such as “13 Ways to Move Big Files on the Web.”
  13. Anywired Self-employment advice from Skellie (of #10 in our Top Freelance Blogging Blogs) with plenty to offer freelancers–like this entire archived category of posts.
  14. Self Employed Blog Blogger Eartha shares the things she’s learned in her own journey working through the internet, such as when to answer phone calls and e-mails.
  15. oDesk blog We’re not gonna lie to you, we think our blog is pretty great. Just click on our “Freelancing Tips” archive, and you’ll know why too.

TOP BLOGS FOR FREELANCE DESIGNERS:

  1. Fuel Your Creativity This incredible and fast-growing blog from multiple contributors has built a readership of almost 10,000 in just barely more than one year, has special tips for freelance designers and tons of freebies.
  2. CMD+Shift Design Blog On this blog you’ll find plenty of design talk and freelance advice from Liz Andrade, including her post “15 Must-Have Books for … Freelancers” (hint: a lot of these books’ authors have their own blogs right here on our list!).
  3. The Design Cubicle Hints, free stuff and wisdom can all be found at Brian Hoff’s graphic design blog, including a whole archived section of freelance wisdom.
  4. Outlaw Design Blog This site is packed with freelance advice from graphic designer Danny Outlaw–like archived tutorials and a discussion of contract design and the economy.
  5. Fudge Graphics Freelancers can find plenty of graphic design resources, freebies and inspiration from Franz Jeitz’s blog.

TOP BLOGS FOR FREELANCE GRAPHIC DESIGN PLUS … BLOGS

  1. David Airey This blog highlights David Airey’s work and methods for logo design and, thus, marketing is also heavily covered in this very popular graphic design blog with over 10,000 subscribers. His November 2008 take on the economy and contract design work encourages and inspires.
  2. You the Designer With nearly 10,000 readers and plenty of freebies, this blog by Gino Orlandi even has its own forums. Of the best posts: “5 Ways to Optimize Your Portfolio for Local Traffic”
  3. Designers Who Blog As the name suggests, multiple designers share guidance and ideas, but also simply review other designers’ blogs in posts. In other words, this blog is a portal to a hundred other useful blogs and some cover more than just design.
  4. My Ink Blog This helpful graphic and web design advice blog, created by freelancer Andrew Houle in 2008, includes the post “5 Things Every Freelance Designer Should Do.”
  5. Brian Yerkes This site covers a lot of territory including design, blogging, marketing and freelancing, all with posts from the blogger himself, Brian Yerkes. The must-read is a post offering the 50 characteristics of freelancers who won’t succeed.
  6. Graphic Design Blog Freelancer Tara’s blog gives tip on contract graphic design, illustrating and web design–and is growing in readership. Don’t miss her regularly scheduled and insightful interviews with other freelance designers.
  7. All About Freelance This very helpful blog covers tools and tips for freelance graphic designers and web designers, and was written by one of their own.
  8. I’mJustCreative In this blog, Graham Smith offers his readers logo inspiration and creation tips, marketing savvy and social media discussion.
  9. CrazyLeaf Design Blog Here, multiple authors share concepts and tools for both graphic design and web design, with many tutorials archived.
  10. Method to the Mayhem Calvin Lee of Mayhem Studios gives his thoughts on design, marketing and promotion through this blog, especially in his recent post about branding yourself through Twitter.
  11. Design O’Blog Here you’ll find tools from Niki Brown, plus 216 posts about graphic design. Her tips for success and inspiration are worth your time, but she also happens to cover web 2.0, design ethics and more.
  12. Design for Users Blogger Kristi Colvin speaks to design, marketing, social media and more. However, her message to designers (which is “get a mobile web site“) really shows her freelance savvy.

TOP FREELANCE ILLUSTRATION & ANIMATION BLOGS:

  1. Animation Tips & Tricks The senior animator of Industrial Light and Magic, Shawn Kelly, hosts this beautiful blog that guides animators (even while selling AnimationMentor.com) through topics like how to proceed after you’ve been given the storyboard (by Nick Bruno).
  2. Chewing Pencils Freelance cartoonist and illustrator Matt Glover doles out great advice for others, such as “The Isolation of the Freelancer.” He should know, Matt is one of many contract animators who works alone.
  3. Coghillustration Cartoon illustrator George Coghill offers advice, not just his work. Freelancers can enjoy this entry which answers the looming question “Can a Solo Freelance Artist Make a Real Living?”
  4. Illustration Castle This is a great blog of advice for illustrators from talented Canadian artist Heather Castles. One of many topics is how to use iPhoto to catalog your illustrations.
  5. Character Design This artist interview and gallery blog is a must for animators, complete with the Character Design Forum where members can share ideas, critique each others’ work, etc.

TOP BLOGS FOR FREELANCE SOFTWARE DEVELOPERS:

  1. Joel on Software Developer Joel Spolsky has blogged over a 1,000 times on the topic of software management, including “The Absolute Minimum Every Developer … Must Know About Unicode and Character Sets.” This blog has a discussion group and many articles have been translated into other languages.
  2. Computer Zen Learn software development news–along with nearly 40,000 other subscribers–and “programming life” from Scott Hanselman. His blog includes 168 entries on bugs, as well as his HanselMinutes podcasts.
  3. Code Better Brendan Tompkins and Darrell Norton founded this very popular blog (with nearly 30,000 subscribers), which has multiple contributors. All are in the business of teaching developers how to (what else?) code better and there’s a little freelance advice as well, in Jeff Lynch’s entry “Finding Freelance Work.”
  4. Code Monkeyism With 1500 loyal readers, Stephan Schmidt’s regularly writes his programming blog, which is all tech and very little fluff. While he has a hefty focus on Java, he also has a lot of entries on general software development.
  5. Warren Seen Australian software developer Warren Seen has been dishing out how-to’s on his blog since 2006. Besides his how-to’s for programming, he has a great post from 2007 for every freelance developer called “Why I’m Assertive With My Clients.”
  6. Eric.Weblog On this blog you’ll find software engineering advice from Eric Sink of SourceGear, who even throws in an entry perfect for freelancers about becoming your own boss.

TOP BLOGS FOR FREELANCE WEB DESIGNERS:

  1. Smashing Magazine This blog of web designer innovations and issues is based out of Germany–but don’t worry, it’s all in English–and has almost 99,000 subscribers, a forum, and tons of advice posts like “75 (really) Useful JavaScript Techniques.”
  2. Noupe News and helpful information for web designers from the best of the best, and they have nearly 22,000 subscribers. A sample of the blog’s advice? “10 Ways to Automatically and Manually Backup MySQL Database.”
  3. Vandelay Design Almost 13,000 web designers subscribe to this blog, perfect for freelancers, especially with posts like “77 Resources to Simplify Your Life as a Web Designer.”
  4. Wake Up Later You can’t go two links in the work-at-home web-design blogosphere without someone mentioning Samuel Ryan’s blog, which features free resources and tips for freelance web designers, like where not to use Flash.
  5. DevSnippets This blog is a brainchild of Noupe, where members submit web design and development codes as posts, like this one about navigation menu techniques.
  6. Six Revisions This blog offers information and helps for web designers and developers, from Jacob Gube and others, and it’s full of archived freebies, like these 20 denim textures.
  7. Full Frontal Freelance This unique, short-form blog (tumblelog) gives advice for freelance web designers by pulling links from all over the blogosphere. It’s like a million blogs in one. Intrigued by a post title, like “How Not to Write Like a Designer”? Click on the link and wake up in a whole new freelance or web design blog.
  8. CSS-Tricks Blogger Chris Coyier leads this blog, a popular community for web designers, with a forum of 1500 members. It should be no surprise the site gains popularity every day, with great posts like “So Your Client Has a This Idea … and You Think It’s a Bad One.”
  9. SitePoint At least ten different bloggers have had their work spun into one here, with topics like web design and development issues for freelancers, like “5 Rarely Used CSS Properties.”
  10. I Design Studios Web designer Selene Bowlby blogs her tip for freelance web designers here, like her post on the essential web development tools.
  11. StylizedWeb This web design trends and tutorials blog from Ross Johnson gives away a lot of freebies, and discusses the future of blog design in this post.
  12. Bokardo Blogger Joshua Porter’s tips for website design and development, along with posts like this: “Who Cares How Pretty Web Sites Are?”
  13. Best Practices This freelance advice blog, written for web site designers, features great posts like “Stripping HTML Tags From User Inputs.” It also includes a lot about how to handle your clientel.
  14. Woork This new-in-2009 blog offers good advice for web developers, like useful scripts for platting charts and graphs on a site, and is run by Antionio Lupetti.
  15. Regular Geek Internet design with a healthy dose of social media tips thrown in by the blogger himself. Thinking of learning a new programming language? Read this first.

TOP FREELANCE BLOGGING BLOGS:

  1. Pro Blogger Advice for successful blogging–including freelance bloggers–from Darren Rowse. Subscribed to by over 75,000 readers, it was a clear choice for the top blog, even if it didn’t already have insightful posts like this one on better SEO.
  2. CopyBlogger This blog–with almost 55,000 subscribers–teaches copywriting, marketing and social media along with blogging best-practices, and was created by Brian Clark. (Check out the tricks to writing a post in 20 minutes by contributor Jim Estill.)
  3. Daily Blog Tips This blog is written by Daniel Scocco, and won “Best Web Development Blog” category in the 2007 Weblog Awards. Over 17,000 subscribers love it for posts like: “Create a Functional Footer for Your Blog.”
  4. Men With Pens These four writers–one does happen to be a woman–offer freelancing tips, including tips specific to blogging, and even have a forum. Freelancers will appreciate this deadline discussion.
  5. Blog Design Blog Just like the title says, Vinh Le gives web design advice specifically for blogs, and it’s always excellent–as in his post “37 Ways to Design the Comments Form.”
  6. Remarkablogger How-to’s for those who blog, from Michael Martine, including this post on video blogging and five free Wordpress themes.
  7. Lorelle on WordPress This blog–daily guidance from Lorelle VanFossen on WordPress blogging–took third place in the “Blogs on Blogging” category in the 2007 Blogger Choice Awards.
  8. Blogging Basics 101 Blogger Melanie Nelson gives tips on SEO, making money and blog maintenance, including a whole archive of content writing advice, such as the key to writing a successful post.
  9. Inkwell Editorial Though Yuwanda Black won’t blog again until Fall 2009, hundreds of helpful old blog entries will do, like “9 Useful Tips for Bloggers.”
  10. Skelliewag A source of blogging advice from one who knows. Skellie has two of them (see #13 Anywired in our Freelancing Blog list above).

TOP BLOGS FOR FREELANCE WRITERS:

  1. Bizzia As it was once The Golden Pencil, Bizzia has an entire archive for freelancers, as well as how-to’s like this gem: “How to Find Photos for Your Writing.”
  2. The Renegade Writer A blog of freelance best-practices from the authors of the book by the same name. The must read post? “The Freelance Writer’s Bill of Rights.”
  3. Freelance Zone Editors Joe Wallace and Catherine Tilly share freelance writing advice on this blog, such as “The 5 Freelance Writing Mistakes That Will Make You Look Like a Noob.”
  4. The Urban Muse Freelance writing tidbits from Susan Johnston have been on this blog since 2006. One of the latest nuggest is one of the best. It’s about how to be frugal as you freelance. (Writing White Papers named it one of the Top 10 Blogs for Writers last year.)
  5. Get Paid to Write Online Freelance writer Sharon Hurley Hall’s blog shares how she built her successful career, with a few necessary rants along the way, like this one.
  6. The Writing Journey Freelance internet writing advice from Bob Younce, whose April 6, 2009 post explains why internet writers need to have a specialty.
  7. Ink Thinker Writer and editor Kristen King’s blog is a must-read for freelancers like her, but one of the best posts was written by a guest. This post tells all writers how to be nicer to their clients.
  8. Bad Language Blog author Matthew Stibbe offers PR, interviewing and freelance advice to writers, such as “How to Make Money Writing for the Web.”
  9. The Writer’s Blog Blogger Dana Prince dishes on her freelance writing journey, even her experience using Copyscape.
  10. Freelance Writerville Though her home was once Adventures in Freelancing, freelancer Yolander Prinzel’s took her writing savvy to this new blog where contract workers will find wisdom in posts like this one.
  11. The Writer’s Manifesto This resource is Monika Mundell’s blog, full of tips for freelance writing, such as “The Dangers of Multitasking” while you write.
  12. Fab Freelance Writing Blog Australian blogger Angela Booth teaches freelancers how to make money, and even has a great podcast.
  13. Allena’s Freelance Writing Blog This is About.com’s writing blog from Allena Tapia, and she even has a forum. Don’t let the fact that it’s from About.com scare you, it’s a great resource.
  14. Chris Blogging Blogger Chris Bibey shares the keys to his freelance writing success and deals with related topics, like deadlines.
  15. Freelance Tips A blog with freelance writing wisdom and leads, this post teaches freelancers to write a business plan for themselves.
  16. Daily Freelance Writing Tips This blog contains practical advice for freelance writers from Chesley Moldonado–such as how to build up confidence.

TOP FREELANCE COPYWRITING & MARKETING BLOGS:

  1. Micro Persuasion This is a blog of marketing talk–with over 50,000 daily readers–from Steve Rubel. Marketers, especially the freelance variety, will appreciate posts like “5 Digital Trends to Watch for 2009.”
  2. Writing White Papers If you are a freelance copywriter/marketer, you should know Michael Stelzner’s blog is as popular as his book by the same name. In fact 20,000 get his newsletter and you can tell by the comments that his posts–like this one about dealing with unresponsive clients–are all the buzz.
  3. Copywrite Underground Freelancer Tom Chandler explains the ins and outs of the marketing business and–in this post–freelancing in this economy.
  4. Freelance Copywriters Blog Freelance copywriter Sally Ormond’s tips for freelancing, such as these “10 Tips for Dynamite Copy,” are exceptionally helpful for contract writers and marketers alike.

TOP FREELANCE LIFESTYLE BLOGS:

  1. Zen Habits Uber-popular blogger Leo Babauta–over 100,000 people follow his blog feed–offers advice freelancers can live by, like the posts “Purpose Your Day” and “How to Accept Criticism.”
  2. Experiments in Lifestyle Design Author of the bestselling book The Four Hour Work Week, Tim Ferriss blogs his smart thoughts on what you need in an office chair and how to save your weekends.
  3. Dumb Little Man Tips for Life Not geared for freelancers alone, this blog–created by ordinary guy Jay White–contains nuggets of wisdom to increase your productivity, like “13 Effective Time Management Tips for Web Workers.”
  4. Rock Your Day Get your life in order and freelance better with Dave Navarro (not that Dave Navarro) as you live purposefully The can’t-miss inspirational post? “Why You Should Always, Always Keep Planting Seeds.”
  5. Freelance Parent Two freelance writers–Tamara Berry and Lorna Doone Brewer–discuss the ins and outs of raising kids while working from home.
  6. Just Loving Life This blog has many things, but most importantly, it has an archive of advice for getting the most out of working from home. (The blog is written by friends Wanda and Paula.)

TOP FREELANCE SOCIAL MEDIA BLOGS:

  1. Mashable If you have yet to master social media to further your freelancing career, this blog is for you–and their other 205,000 subscribers will tell you the same thing. The contributors to the blog keep readers updated with the latest advances and advice regarding all forms of social media, such as the post “The 7 Ways to Approach Twitter.”
  2. Social Media Explorer It’s no Mashable, but over 4,000 subscribers look to blogger Jason Falls for social media best-practices and strategies through his blog. Posts like “Persistence: The Key to Social Media Stretegy” are why he has built a fan-base in less than a year and a half.

TOP SPECIALIZED FREELANCE BLOGS:

Note: These last five blogs are not ranked, merely numbered. Pitting these particular blogs against each other would be like comparing apples to oranges.

  1. 1001 Freelance Travel Writer Tips This blog is full of specific advice for travel writers (David of Bizzare Places is only on #92 to date), such as #61, which tells readers to avoid overusing I and me.
  2. Anti 9 to 5 Guide Author of the book by the same name, Michelle Goodman, gives freelance advice targeted to women on her blog. (Check out this interview, comparing the differences between the sexes when it comes to freelancing.)
  3. Freelancers Union This union resource blog deals with the ethical and labor issues of contract work–including these thoughts on whether or not freelancers should lower their rates just because their clients are struggling.
  4. June Walker She’s been advising the self-employed on their taxes since 1979, and answering their questions through her blog since 2006. Of particular interest: “Bloggers, Designers … : Three Ways to Expand Business Deductions.”
  5. The Ace Your Interview Blog Certified career development practitioner Fiona MacKay Young gives expert advice for interviews, including dealing with illegal questions even contract workers shouldn’t answer.
  6. Undress For Success Advice and resources for working from home.

In Closing …

Did we miss one of your favorite freelancer blogs? Tell us about it in your comments!

Wednesday, March 31, 2010

The Future Of Outsourcing

Best Out Sourcing Job solution at http://www.lanceearner.com

The Future Of Outsourcing
How it's transforming whole industries and changing the way we work

Globalization has been brutal to midwestern manufacturers like the Paper Converting Machine Co. For decades, PCMC's Green Bay (Wis.) factory, its oiled wooden factory floors worn smooth by work boots, thrived by making ever-more-complex equipment to weave, fold, and print packaging for everything from potato chips to baby wipes.

But PCMC has fallen on hard times. First came the 2001 recession. Then, two years ago, one of the company's biggest customers told it to slash its machinery prices by 40% and urged it to move production to China. Last year, a St. Louis holding company, Barry-Wehmiller Cos., acquired the manufacturer and promptly cut workers and nonunion pay. In five years sales have plunged by 40%, to $170 million, and the workforce has shrunk from 2,000 to 1,100. Employees have been traumatized, says operations manager Craig Compton, a muscular former hockey player. "All you hear about is China and all these companies closing or taking their operations overseas."

But now, Compton says, he is "probably the most optimistic I've been in five years." Hope is coming from an unusual source. As part of its turnaround strategy, Barry-Wehmiller plans to shift some design work to its 160-engineer center in Chennai, India. By having U.S. and Indian designers collaborate 24/7, explains Vasant Bennett, president of Barry-Wehmiller's engineering services unit, PCMC hopes to slash development costs and time, win orders it often missed due to engineering constraints -- and keep production in Green Bay. Barry-Wehmiller says the strategy already has boosted profits at some of the 32 other midsize U.S. machinery makers it has bought. "We can compete and create great American jobs," vows CEO Robert Chapman. "But not without offshoring."

Come again? Ever since the offshore shift of skilled work sparked widespread debate and a political firestorm three years ago, it has been portrayed as the killer of good-paying American jobs. "Benedict Arnold CEOs" hire software engineers, computer help staff, and credit-card bill collectors to exploit the low wages of poor nations. U.S. workers suddenly face a grave new threat, with even highly educated tech and service professionals having to compete against legions of hungry college grads in India, China, and the Philippines willing to work twice as hard for one-fifth the pay.

Workers' fears have some grounding in fact. The prime motive of most corporate bean counters jumping on the offshoring bandwagon has been to take advantage of such "labor arbitrage" -- the huge wage gap between industrialized and developing nations. And without doubt, big layoffs often accompany big outsourcing deals.

The changes can be harsh and deep. But a more enlightened, strategic view of global sourcing is starting to emerge as managers get a better fix on its potential. The new buzzword is "transformational outsourcing." Many executives are discovering offshoring is really about corporate growth, making better use of skilled U.S. staff, and even job creation in the U.S., not just cheap wages abroad. True, the labor savings from global sourcing can still be substantial. But it's peanuts compared to the enormous gains in efficiency, productivity, quality, and revenues that can be achieved by fully leveraging offshore talent.

Thus entrepreneurs such as Chapman see a chance to turn around dying businesses, speed up their pace of innovation, or fund development projects that otherwise would have been unaffordable. More aggressive outsourcers are aiming to create radical business models that can give them an edge and change the game in their industries. Old-line multinationals see offshoring as a catalyst for a broader plan to overhaul outdated office operations and prepare for new competitive battles. And while some want to downsize, others are keen to liberate expensive analysts, engineers, and salesmen from routine tasks so they can spend more time innovating and dealing with customers. "This isn't about labor cost," says Daniel Marovitz, technology managing director for Deutsche Bank's global businesses . "The issue is that if you don't do it, you won't survive."

The new attitude is emerging in corporations across the U.S. and Europe in virtually every industry. Ask executives at Penske Truck Leasing why the company outsources dozens of business processes to Mexico and India, and they cite greater efficiency and customer service. Ask managers at U.S.-Dutch professional publishing giant Wolters Kluwer (WTKWY ) why they're racing to shift software development and editorial work to India and the Philippines, and they will say it's about being able to pump out a greater variety of books, journals, and Web-based content more rapidly. Ask Wachovia Corp. (WB ), the Charlotte (N.C.)-based bank, why it just inked a $1.1 billion deal with India's Genpact to outsource finance and accounting jobs and why it handed over administration of its human-resources programs to Lincolnshire (Ill.)-based Hewitt Associates (HEW ). It's "what we need to do to become a great customer-relationship company," says Director of Corporate Development Peter J. Sidebottom. Wachovia aims to reinvest up to 40% of the $600 million to $1 billion it hopes to take out in costs over three years into branches, ATMs, and personnel to boost its core business.

Here's what such transformations typically entail: Genpact, Accenture (ACN ), IBM Services, or another big outsourcing specialist dispatches teams to meticulously dissect the workflow of an entire human resources, finance, or info tech department. The team then helps build a new IT platform, redesigns all processes, and administers programs, acting as a virtual subsidiary. The contractor then disperses work among global networks of staff ranging from the U.S. to Asia to Eastern Europe.

In recent years, Procter & Gamble (PG ), DuPont (DD ), Cisco Systems (CSCO ), ABN Amro (ABN ), Unilever, Rockwell Collins (COL ), and Marriott (MAR ) were among those that signed such megadeals, worth billions.

In 2004, for example, drugmaker Wyeth Pharmaceuticals transferred its entire clinical-testing operation to Accenture Ltd. "Boards of directors of virtually every big company now are insisting on very articulated outsourcing strategies," says Peter Allen, global services managing director of TPI, a consulting firm that advised on 15 major outsourcing contracts last year worth $14 billion. "Many CEOs are saying, 'Don't tell me how much I can save. Show me how we can grow by 40% without increasing our capacity in the U.S.,"' says Atul Vashistha, CEO of outsourcing consultant neoIT and co-author of the book The Offshore Nation.

Some observers even believe Big Business is on the cusp of a new burst of productivity growth, ignited in part by offshore outsourcing as a catalyst. "Once this transformation is done," predicts Arthur H. Harper, former CEO of General Electric Co.'s equipment management businesses, "I think we will end up with companies that deliver products faster at lower costs, and are better able to compete against anyone in the world." As executives shed more operations, they also are spurring new debate about how the future corporation will look. Some management pundits theorize about the "totally disaggregated corporation," wherein every function not regarded as crucial is stripped away.

PROCESSES, NOW ON SALE
In theory, it is becoming possible to buy, off the shelf, practically any function you need to run a company. Want to start a budget airline but don't want to invest in a huge back office? Accenture's Navitaire unit can manage reservations, plan routes, assign crew, and calculate optimal prices for each seat.

Have a cool new telecom or medical device but lack market researchers? For about $5,000, analytics outfits such as New Delhi-based Evalueserve Inc. will, within a day, assemble a team of Indian patent attorneys, engineers, and business analysts, start mining global databases, and call dozens of U.S. experts and wholesalers to provide an independent appraisal.

Want to market quickly a new mutual fund or insurance policy? IT services providers such as India's Tata Consultancy Services Ltd. are building software platforms that furnish every business process needed and secure all regulatory approvals. A sister company, Tata Technologies, boasts 2,000 Indian engineers and recently bought 700-employee Novi (Mich.) auto- and aerospace-engineering firm Incat International PLC. Tata Technologies can now handle everything from turning a conceptual design into detailed specs for interiors, chassis, and electrical systems to designing the tooling and factory-floor layout. "If you map out the entire vehicle-development process, we have the capability to supply every piece of it," says Chief Operating Officer Jeffrey D. Sage, an IBM and General Motors Corp. (GM ) veteran. Tata is designing all doors for a future truck, for example, and the power train for a U.S. sedan. The company is hiring 100 experienced U.S. engineers at salaries of $100,000 and up.

Few big companies have tried all these options yet. But some, like Procter & Gamble, are showing that the ideas are not far-fetched. Over the past three years the $57 billion consumer-products company has outsourced everything from IT infrastructure and human resources to management of its offices from Cincinnati to Moscow. CEO Alan G. Lafley also has announced he wants half of all new P&G products to come from outside by 2010, vs. 20% now. In the near future, some analysts predict, Detroit and European carmakers will go the way of the PC industry, relying on outsiders to develop new models bearing their brand names. BMW has done just that with a sport-utility vehicle. And Big Pharma will bring blockbuster drugs to market at a fraction of the current $1 billion average cost by allying with partners in India, China, and Russia in molecular research and clinical testing.

Of course, corporations have been outsourcing management of IT systems to the likes of Electronic Data Systems (EDS ), IBM (IBM ), and Accenture for more than a decade, while Detroit has long given engineering jobs to outside design firms. Futurists have envisioned "hollow" and "virtual" corporations since the 1980s.

It hasn't happened yet. Reengineering a company may make sense on paper, but it's extremely expensive and entails big risks if executed poorly. Corporations can't simply be snapped apart and reconfigured like LEGO sets, after all. They are complex, living organisms that can be thrown into convulsions if a transplant operation is botched. Valued employees send out their résumés, customers are outraged at deteriorating service, a brand name can be damaged. In consultant surveys, what's more, many U.S. managers complain about the quality of offshored work and unexpected costs.

But as companies work out such kinks, the rise of the offshore option is dramatically changing the economics of reengineering. With millions of low-cost engineers, financial analysts, consumer marketers, and architects now readily available via the Web, CEOs can see a quicker payoff. "It used to be that companies struggled for a few years to show a 5% or 10% increase in productivity from outsourcing," says Pramod Bhasin, CEO of Genpact, the 19,000-employee back-office-processing unit spun off by GE last year. "But by offshoring work, they can see savings of 30% to 40% in the first year" in labor costs. Then the efficiency gains kick in. A $10 billion company might initially only shave a few million dollars in wages after transferring back-office procurement or bill collection overseas. But better management of these processes could free up hundreds of millions in cash flow annually.

Those savings, in turn, help underwrite far broader corporate restructuring that can be truly transformational. DuPont has long wanted to fix its unwieldy system for administering records, payroll, and benefits for its 60,000 employees in 70 nations, with data scattered among different software platforms and global business units. By awarding a long-term contract to Cincinnati-based Convergys Corp., the world's biggest call-center operator, to redesign and administer its human resources programs, it expects to cut costs 20% in the first year and 30% a year afterward. To get corporate backing for the move, "it certainly helps a lot to have savings from the outset," says DuPont Senior Human Resources Vice-President James C. Borel.

Creative new companies can exploit the possibilities of offshoring even faster than established players. Crimson Consulting Group is a good example. The Los Altos (Calif.) firm, which performs global market research on everything from routers to software for clients including Cisco, HP, and Microsoft (MSFT ), has only 14 full-time employees. But it farms out research to India's Evalueserve and some 5,000 other independent experts from Silicon Valley to China, the Czech Republic, and South Africa. "This allows a small firm like us to compete with McKinsey and Bain on a very global basis with very low costs," says CEO Glenn Gow. Former GE exec Harper is on the same wavelength. Like Barry-Wehmiller, his new five-partner private-equity firm plans to buy struggling midsize manufacturers and use offshore outsourcing to help revitalize them. Harper's NexGen Capital Partners also plans to farm out most of its own office work. "The people who understand this will start from Day One and never build a back room," Harper says. "They will outsource everything they can."

Some aggressive outsourcers are using their low-cost, superefficient business models to challenge incumbents. Pasadena, (Calif.)-based IndyMac Bancorp Inc. (NDE ), founded in 1985, illustrates the new breed of financial services company. In three years, IndyMac has risen from 22nd-largest U.S. mortgage issuer to No. 9, while its 18% return on equity in 2004 outpaced most rivals. The thrift's initial edge was its technology to process, price, and approve loan applications in less than a minute.

But IndyMac also credits its aggressive offshore outsourcing strategy, which Consumer Banking CEO Ashwin Adarkar says has helped make it "more productive, cost-efficient, and flexible than our competitors, with better customer service." IndyMac is using 250 mostly Indian staff from New York-based Cognizant Technology Solutions Corp. (CTSH ) to help build a next-generation software platform and applications that, it expects, will boost efficiency at least 20% by 2008. IndyMac has also begun shifting tasks, ranging from bill collection to "welcome calls" that help U.S. borrowers make their first mortgage payments on time, to India's Exlservice Holdings Inc. and its 5,000-strong staff. In all, Exlservice and other Indian providers handle 33 back-office processes offshore. Yet rather than losing any American jobs, IndyMac has doubled its U.S. workforce to nearly 6,000 in four years -- and is still hiring.

SUPERIOR SERVICE
Smart use of offshoring can juice the performance of established players, too. Five years ago, Penske Truck Leasing, a joint venture between GE and Penske Corp., paid $768 million for trucker Rollins Truck Leasing Corp. -- just in time for the recession. Customer service, spread among four U.S. call centers, was inconsistent. "I realized our business needed a transformation," says CFO Frank Cocuzza. He began by shifting a few dozen data-processing jobs to GE's huge Mexican and Indian call centers, now called Genpact. He then hired Genpact to help restructure most of his back office. That relationship now spans 30 processes involved in leasing 216,000 trucks and providing logistical services for customers.

Now, if a Penske truck is held up at a weigh station because it lacks a certain permit, for example, the driver calls an 800 number. Genpact staff in India obtains the document over the Web. The weigh station is notified electronically, and the truck is back on the road within 30 minutes. Before, Penske thought it did well if it accomplished that in two hours. And when a driver finishes his job, his entire log, including records of mileage, tolls, and fuel purchases, is shipped to Mexico, punched into computers, and processed in Hyderabad. In all, 60% of the 1,000 workers handling Penske back-office process are in India or Mexico, and Penske is still ramping up. Under a new program, when a manufacturer asks Penske to arrange for a delivery to a buyer, Indian staff helps with the scheduling, billing, and invoices. The $15 million in direct labor-cost savings are small compared with the gains in efficiency and customer service, Cocuzza says.

Big Pharma is pursuing huge boosts in efficiency as well. Eli Lilly & Co.'s (LLY ) labs are more productive than most, having released eight major drugs in the past five years. But for each new drug, Lilly estimates it invests a hefty $1.1 billion. That could reach $1.5 billion in four years. "Those kinds of costs are fundamentally unsustainable," says Steven M. Paul, Lilly's science and tech executive vice-president. Outsourcing figures heavily in Lilly's strategy to lower that cost to $800 million. The drugmaker now does 20% of its chemistry work in China for one-quarter the U.S. cost and helped fund a startup lab, Shanghai's Chem-Explorer Co., with 230 chemists. Lilly now is trying to slash the costs of clinical trials on human patients, which range from $50 million to $300 million per drug, and is expanding such efforts in Brazil, Russia, China, and India.

Other manufacturers and tech companies are learning to capitalize on global talent pools to rush products to market sooner at lower costs. OnStor Inc., a Los Gatos (Calif.) developer of storage systems, says its tie-up with Bangalore engineering-services outfit HCL Technologies Ltd. enables it to get customized products to clients twice as fast as its major rivals. "If we want to recruit a great engineer in Silicon Valley, our lead time is three months," says CEO Bob Miller. "With HCL, we can pick up the phone and get somebody in two or three days."

Such strategies offer a glimpse into the productive uses of global outsourcing. But most experts remain cautious. The McKinsey Global Institute estimates $18.4 billion in global IT work and $11.4 billion in business-process services have been shifted abroad so far -- just one-tenth of the potential offshore market. One reason is that executives still have a lot to learn about using offshore talent to boost productivity. Professor Mohanbir Sawhney of Northwestern University's Kellogg School of Management, a self-proclaimed "big believer in total disaggregation," says: "One of our tasks in business schools is to train people to manage the virtual, globally distributed corporation. How do you manage employees you can't even see?"

The management challenges will grow more urgent as rising global salaries dissipate the easy cost gains from offshore outsourcing. The winning companies of the future will be those most adept at leveraging global talent to transform themselves and their industries, creating better jobs for everyone


Outsourcing

Outsourcing (wikt: outsourcing) often refers to the process of subcontracting to a third-party.[1] While outsourcing may be viewed as a component to the growing division of labor encompassing all societies, the term did not enter the English-speaking lexicon until the 1980s. Since the 1980s, transnational corporations have increased subcontracting across national boundaries. In the United States, outsourcing is a popular political issue, especially during election years.

Overview

A precise definition of outsourcing has yet to be agreed upon. Thus, the term is used inconsistently. However, outsourcing is often viewed as involving the contracting out of a business function to an external provider.[2] In this sense, two organizations may enter a contractual agreement involving an exchange of services and payments. Of recent concern is the ability of businesses to outsource to suppliers outside the nation, sometimes referred to as offshoring or offshore outsourcing (which are odd terms because doing business with another country does not mean you have to go offshore In addition, several related terms have emerged to grasp various aspects of the complex relationship between economic organizations or networks, such as nearshoring, multisourcing[8][9] and strategic outsourcing.Almost any conceivable business practice can be outsourced for any number of stated reasons. The implications of outsourcing objectively and subjectively vary across time and space.

Why Outsourcing ?


Organizations that outsource are seeking to realize benefits or address the following issues:

  • Cost savings — The lowering of the overall cost of the service to the business. This will involve reducing the scope, defining quality levels, re-pricing, re-negotiation, cost re-structuring. Access to lower cost economies through offshoring called "labor arbitrage" generated by the wage gap between industrialized and developing nations.
  • Focus on Core Business — Resources (for example investment, people, infrastructure) are focused on developing the core business. For example often organizations outsource their IT support to specialised IT services companies.
  • Cost restructuring — Operating leverage is a measure that compares fixed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from fixed to variable cost and also by making variable costs more predictable.
  • Improve quality — Achieve a step change in quality through contracting out the service with a new service level agreement.
  • Knowledge — Access to intellectual property and wider experience and knowledge.
  • Contract — Services will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services.
  • Operational expertise — Access to operational best practice that would be too difficult or time consuming to develop in-house.
  • Access to talent — Access to a larger talent pool and a sustainable source of skills, in particular in science and engineering.
  • Capacity management — An improved method of capacity management of services and technology where the risk in providing the excess capacity is borne by the supplier.
  • Catalyst for change — An organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. The outsourcer becomes a Change agent in the process.
  • Enhance capacity for innovation — Companies increasingly use external knowledge service providers to supplement limited in-house capacity for product innovation.[19][20]
  • Reduce time to market — The acceleration of the development or production of a product through the additional capability brought by the supplier.
  • Commodification — The trend of standardizing business processes, IT Services, and application services which enable to buy at the right price, allows businesses access to services which were only available to large corporations.
  • Risk management — An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation.
  • Venture Capital — Some countries match government funds venture capital with private venture capital for start-ups that start businesses in their country.
  • Tax Benefit — Countries offer tax incentives to move manufacturing operations to counter high corporate taxes within another country.
  • Scalability — The outsourced company will usually be prepared to manage a temporary or permanent increase or decrease in production.
  • Creating leisure time — Individuals may wish to outsource their work in order to optimise their work-leisure balance.

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