The Total Cost of Outsourcing: The Rural Alternative

How to use outsourcing to your financial and operational advantage

In today’s tough economy, businesses of all sizes and industries are seeking new ways to maximize profit margins. Outsourcing has been a staple of the corporate diet for years as we search for better and cheaper ways to work.  Outsourcing, however, has its costs and operational issues. This webinar shows how the cost of offshoring compares to rural onshoring.

Attend this free webinar to learn:

  • The Total Cost of Outsourcing (TCO)
  • The different types of outsourcing
  • Cost of Outsourcing
    • Labor
    • Transition
    • Operation
    • Management Reserve
  • Evolution of outsourcing – Follow the money
  • Rural onshoring alternatives
  • 3Ps of successful rural outsourcing

The Total Cost of Outsourcing: The Rural Alternative

How to use outsourcing to your financial and operational advantage

January 7, 2010 | 2pm EST / 1pm CST / 12pm MST / 11am PST


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About Your Presenter

Martin is an Executive leader with over 25 years of Engineering & IT management experience at Fortune 100 firms. He is a certified Lean Six Sigma Black Belt with over 12 years of experience in the selection and operation of ITO operations in Europe, Asia, North and South America. Martin specializes in identifying and implementing the processes and controls necessary for successful onshore, nearshore and offshore performance and profitable growth.

About the Presenter:


Martin J. Gardocki

COO and acting Vice President
of Ohio, Indiana and Kentucky




Webinar:

The Total Cost of Outsourcing:
The Rural Alternative

Date:

Thursday, January 7, 2010

Time:

2pm EST / 1pm CST /
12pm MST / 11am PST

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December 10th, 2009 by May Advincula Leave a reply »

In an IMF Web Forum, Martin Gardocki from Rural America Onshore Sourcing, discussed the rural alternative in the total cost of outsourcing. Rural America Onshore Sourcing is responsible for finding and aggregating rural talent to provide customers with contract assistance as required for their businesses.

The different types of outsourcing that exist include:

  • USA Urban Outsourcing (domestic, urban firms contracted to provide a service)
  • Offshoring (contracting with firms in places such as India and China)
  • Nearshoring (outsourcing to firms in Central and South America)
  • USA Rural Onshoring (domestic firms in rural communities or distributed rural teams contracted to provide a service)

According to Gardocki, “the opportunity of outsourcing is to actually use the capacity and the capability of the outsourcer to drive even further benefits going forward.”

There are 4 basic costs associated with outsourcing which include the following:

1.      Labor (cost of personnel and source of savings generated through arbitrage)

2.      Transition (cost of identifying, negotiating, and moving work to the outsourcer,

3.      Operation (ongoing cost of the relationship)

4.      Management reserve (cost of managing the unexpected)

ARBITRAGE: “The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time.” –From investopedia.com

Gardocki explains that the evolution of outsourcing began with contracting with urban vendors where good work came at a premium price. With offshore sourcing there was significant cost savings in comparison to urban vendors, but the overhead costs of governing communication and productivity generally add themselves to the equation. Gardocki states, “As people have become more comfortable with the offshore model and companies become more global, the whole concept of having captive offshore development centers has crept up over the last 5-10 years. Basically [you avoid] the middle man markup and [do] it yourself.” In Gardocki’s own experiences, he has known many owners of small to medium sized business where low cost providers did not necessarily work out and their productivity dropped dramatically for every transition which delays the promise of ongoing benefits and a wealth of capability and capacity. According to Gardocki, what is more alarming is the effect on the customers because “they feel the pain in delayed delivery, they feel the pain in increased costs, and basically you’re the one who has to tell them why,” Gardocki explains. As a result, people look for other areas in which they can reduce some overhead of the operation and still get some of the savings.

The Rural Alternative involves domestic firms in rural communities or distributed rural teams contracted to provide a service. There are millions of people willing and able to work from their homes or local offices with strong work ethic and speak the same language. They are technically skilled to meet the demands of today’s information technology and business process outsourcing environment.

The “3 Ps” of rural onshoring include:

  • Proximity to broadband (access to internet at speed capable of sustained operation)
  • Population Density (depending on the skill and number of personnel required, you can work in a single community or require personnel across multiple regions or states)
  • Process disciple (dispersed or remote teams require process rigor to ensure efficient operation. This includes the infrastructure to support collaboration, project management, document management, and standards).

TWO RIVERS, WI (November 27, 2009)Rural America Onshore Sourcing, located in Two Rivers, has hired Sammie McDonald as Director of Human Resources. McDonald, formerly of Green Bay and now a resident of Two Rivers, brings a diverse experienced background including accounting and business management.  This makes her a perfect fit for the Rural America Team. “We are growing at an accelerating rate and Sammie is a corner stone we can build around.” says Christopher Hytry Derrington, CEO of Rural America.

“We are finding a large and talented workforce here in Rural Wisconsin and in other small communities throughout the US”, says Hytry Derrington. McDonald states, “I believe in the purpose of Rural America as keeping jobs in the US is very important to me. By hiring talented rural based professionals, we offer businesses an alternative to costly urban vendors and to sending work offshore, helping them save money in a critical time when so many companies are closing their doors.”

About Rural America Onshore Sourcing

Rural America Onshore Sourcing is an onshore outsourcing company with headquarters in Two Rivers, and offices opening nationwide. A minority owned company, Rural America enables customers to cut their project and labor costs by up to 40%. They offer a variety of Business services including web-design/development, social media marketing, custom graphic design and more.

Safe Harbor Statement: Statements in this press release may contain forward-looking statements based on management’s current expectations, estimates and projections. Words such as “anticipates,” “intends,” “plans,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Rural America Onshore Sourcing is not undertaking any obligation to release publicly any updates to any forward looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

Contact:

Carolyn Mabbitt

Director of Interactive Marketing

Rural America Onshore Sourcing

888 884 4348 ext 6502

Carolyn.mabbitt@ruralamericaonshore.com