The Business of Outsourcing

Context

As a term, outsourcing has been defined as the contracting of a specific task to an external company in the interest of lowering costs and extracting tangible economic benefit. Almost always, outsourcing involves the relocation of the task across national or state borders creating difficulties in government regulation. Outsourcing rose to prominence in the early part of the current decade just after the burst of the dot-com bubble, when software tasks began to be exported to India. Though most people have an intuitive idea of how the process works, often they are not aware of the historical context of this movement, which creates the need for our website.

Market Analysis

Analysis of specific competitors:

Sourcingmag.com – Sourcingmag offers a glossary of terms and a basic introduction to the idea of outsourcing but does not deal with the history and the specific events and legislative measures which have led to this phenomenon.

Outsourceoutrage.com – This site provides a one-sided argument arguing against outsourcing, which we aim to balance by presenting an unbiased view of the topic. Furthermore, it has remained static since it was last updated in 2005 and hence offers outdated information not consistent with recent developments. Outsourcing is often misunderstood as harmful to the US economy, which creates the argument that companies derive economic benefit from it at the expense of US workers. Outsourceoutrage.com seeks to propagate this view to its readers by citing a number of highly compelling anecdotal stories of US workers losing their jobs to outsourcing companies in India.

On the other hand, our site aims to analyze the phenomenon both as part of the local economy and its effect on workers’ families in the US in addition to the impact and social implications on the burgeoning middle class in India.

Market Segmentation

Overwhelmingly, sites regarding outsourcing may be divided into two broad categories:

The first category of sites merely present definitions of the phenomenon and identify the technical aspect of outsourcing. Sites in this category are not entirely devoted to outsourcing but generally provide it as part of a larger database of definitions of a number of other unrelated terms. Though these sites are unbiased in their presentation of the topic, they are often mundane in their approach.

The second type of sites offers services to apply outsourcing to the user’s company without offering an introduction to the idea. These sites have an inherent bias since they are aimed at presenting outsourcing as advantageous to the user. Our site aims to overcome these problems by balancing a historical perspective applicable to a non-technical audience along with supplying small to mid-range companies with customized solutions tailored to their businesses.

Other forms of competition:

A number of articles have been penned about outsourcing, offering overviews of the process, without pursuing it in much depth. Perhaps, the largest competitors to our site are books, which provide both perspective through anecdotal evidence and present accurate research concerning the influx of jobs to India. Within this category of books, there is a separation between books which present complex quantitative analysis of the issue and others which seek to be more approachable in describing the phenomenon A great example of the latter category is Thomas Friedman’s Pulitzer prize winning novel “The Word is Flat”. However, these books are not seen as direct competitors since they are offered in static print form. Since our content is free, dynamic and easily updatable, we possess a key advantage over traditional print media.

Observable Trends

When viewed solely based on searches, it is seen that interest in “outsourcing” is highly correlated to the number of journalistic articles published about it at that specific point in time. The spike in 2004 was the result of the great emphasis on the controversy regarding outsourcing with regard to the US elections and the candidates’ opinions on the matter. Since then, there has been a visible linear decrease in the number of searches for outsourcing, as we become more accustomed to the idea, with the intermittent peaks corresponding to specific articles published.

Target Audience

This site is designed to cater specifically to an audience, which though aware of the process of outsourcing and intellectual property transfer, as presented by the media, seeks a greater understanding of its implications on the US economy, particularly in light of the recent economic slowdown. Though our users are probably self-motivated, they would probably not be willing to pay to subscribe to our site for updates on outsourcing. It is therefore in the best interest of our users for our content to remain free and easily accessible.

Expenditure

The maintenance of the site will be relatively low cost and would consist of:

Personal Time Commitment – Since the design and the content will be entirely self produced, there is a considerable need for time spent on refining the site. Once, the initial groundwork has been laid and I complete the relatively constant historical analysis of outsourcing, I expect the amount of time required to keep it up to date to taper off slightly.

Domain Registration Costs - The site will initially be hosted for free on my personal web space at Stanford. As the site matures, I hope to move it to its own domain and initially fund the relatively low cost of web hosting myself, while implementing the revenue model to offset the overhead.

Revenue Model

Our plan is to provide targeted ads through Google’s AdSense in addition to providing Amazon sponsored links to books and other reference material, which are related to outsourcing and hence may be of interest to our audience.