Amidst the discussion of President Obama’s speech, the anxiety of a recovering economy and the need for a new global sourcing agenda; American Onshoring is gaining firmer ground
Ashwin Razdan

President Obama recently emphasized that outsourcing to foreign countries was one of the reasons for unemployment in the U.S., he also added, “…it is time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs right here in U.S.A.” This is undoubtedly in the interest of the people of America, but has initiated a lot of discussion amongst service providers in other leading destinations. Most outsourcing pundits are already weighing its repercussions. It could also be a major threat to the world’s leading IT and BPO services provider- India- half of whose offshored business comes from the United States.

As for the buyers, it is time (specially in the United States) to re-consider and re-evaluate the pros and cons of offshoring. This will also give most organizations an opportunity to consider other avenues and ways to reduce cost. American onshoring will not go unnoticed this time. After all, the recent survey conducted by research firm Valuenotes Database among 237 publishers, consultants and service providers, largely from the U.S. and UK, notes that though India remains a favoured publishing sourcing destination with 66 per cent of the respondents rooting for it; it is followed by the U.S. with 30 per cent.

Outsourcing to the rural (or non-metropolitan) areas started almost five years ago in selected Tier 2 and Tier 3 cities. Since then, a few organizations have emerged as the front-runners of the American Onshoring business; one of them being Rural America Onshore Sourcing Inc. Christopher Hytry Derrington, CEO,  Rural America Onshore Sourcing Inc., says, “The availability of rural American talent which can be acquired at a cost 40% lesser than in the urban areas, now makes rural America an excellent outsourcing venue. This has been made possible by the spread of broadband Internet services. To further encourage the growing trend, the government has allocated $7 Billion to implement broadband in rural areas. Over the next few years, you will see millions of rural-based low-cost Americans entering the virtual workforce.”

In addition to the rise in opportunities of working in a virtual environment, there are initiatives taken by start-up technology companies like California-based, Systems In Motion, that plans to hire 1,085 workers (for IT services) within five years (in Michigan), according to the Michigan Economic Development Corporation. Debashish Sinha, CMO, Systems In Motion, told annarbor.com, “(on competition from offshore vendors)…The service factory model that we’re building will make it such that we are at least cost comparable. We might not be directly competitive but we will definitely be comparable.”

American Onshore Highlights

Cost of American Onshoring is 40% cheaper than that in Urban areas. It could however, be 15-20% more costly than offshoring (for selected low-end services only).

The Government’s $7 Billion fund to implement broadband in rural areas will facilitate millions of Americans joining the virtual rural workforce and earning a living.

Charges for PHP and .Net -based work costs approx. $50 an hour (significantly cheaper than the urban areas).

Customers are allowed to directly interact with developers, and not only with the sales/ account managers.

Same time-zone advantage.

With use of a virtual business model, scaling up is no more a concern in emerging rural onshore outsourcing destinations.

How does it work?
Christopher believes that in order to be competitive and give customers an irresistible combination of price and quality, one must adopt a new business model; one that is not built on brick and mortar but a virtual (online) environment. This is where the broadband plays a very important role. Very often has Christopher rejected talented professionals who were willing to work but had a dial-up connection at home. This kind of business model runs on the effective use of VoIP and Sharepoint services with online applications that track the progress of the project. He adds, “It doesn’t matter whether the members of the development team (assigned to a project) are based in Wisconsin, North Carolina or Texas. They all sit and work on a common task list and a project schedule.”

Such a model is helping the company scale-up in record time (when the need arises) and utilize the rural talent pool in over 12 states. Their goal being to aggregate low-cost rural American talent on a national level to develop application (or software) for small, medium and large companies.

Types of Projects Outsourced

Type

Client

Software Testing and Performance analysis of an Anti-virus software

A leading developer of Anti-virus software for mobiles, in the U.K.

Java API integration with UPS Java API , J2EE applications on Websphere

A web-based solution provider in the U.S.

.Net, iphone app, eCatalog for a product search engine

An application/ software development company in the U.S.

CakePHP, Java and MySQL (for web based packaging software application)

A packaging engineering support solutions provider in the U.S.

PHP, My SQL, web graphics and interactive media for an eCommerce platform

A high-end B2C retailer in the U.S.

Source: Rural America Onshore Sourcing Inc.

Advice
Each type of outsourcing has its strengths and weaknesses. Depending on what has to be outsourced, seek more information on American onshoring. For example; in case the job does not have much value added services to it, or it has to do with processing calls (or telemarketing); its best they are offshored. For projects that require higher degree of expertise and market knowledge in IT, marketing or support functions; American onshore service providers may offer a better deal. Christopher believes that higher the complexity of the project, higher will be the advantages of rural onshoring, specially for the U.S. market.

Offshoring is here to stay for longer because of the advantages it offers; but with globalization there is another alternative that companies must consider when taking outsourcing decision. That is, onshoring to rural parts of America. Though this sector is still evolving and will take a few years to gain larger market share, it is already helping thousands of Americans make a living and believe in  the power of ‘Yes, we can’.

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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

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There are definitely advantages, but make sure you make an informed decision!

There are a lot of advantages to outsourcing, however, there are also some disadvantages. Since this is such a huge issue, and such a large decision for you to make regarding your company, you should make sure that you take a good look at both sides of the issue before you make your decision. Make sure you know exactly what you stand to gain or lose by outsourcing your work.
First of all, the advantages of outsourcing for your business are that you’ll be able to get some of the less important jobs done for cheaper. For instance, if you’re finding that you do not have enough money in your budget to make necessary changes in order to keep your business afloat, then you should probably find a way to reduce the amount of money that you’re spending.

Another advantage of outsourcing is that there are actually other companies and places where you can get the work done better than you are already in your own company. Not only that, but if you have a company that requires a large number of different products or services in order to function, it might take less time for you to find a good outsourcer than it would take you to train new people.

 

There are a few disadvantages to outsourcing, however, and you should definitely take those into account as well. For one thing, if you outsource, it means that you’re going to have to work very closely with the company that you outsource your work to. Otherwise, you won’t get the finished work as soon as you need it. Having another company involved in your business might get tiresome after a while.

Another thing that you should consider is that depending on where you outsource to, it might hurt your business. This is generally only a big deal if who your customers are really matters, or if you’re a very small business. Some people shop at small businesses because they’re local – and if you’re a business like that, then outsourcing might be to your disadvantage.

In the end, however, the question of whether or not outsourcing is right for your business can only be answered by you.

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