Gradual Development of International Business in form of Outsourcing Business Models

Following the set pattern for doing business is the professional approach, which is applied by the businessmen keeping number of things to achieve maximum level of profit. There may be difference in the offshore outsourcing models according to size and strategies of the company. In the modern times of business, maximum companies of various sizes, outsource their work to reduce the cost according to their specific needs.

Deciding the suitable model before taking any decision is critical because wrong model can cause future losses for the business instead of profit or lowering the cost to business. Taking decision of outsourcing involves various important factors such as selection of suitable country, economic conditions plus government policies of the country, international business strategies, suitable outsourcing strategy and reliable company. As outsourcing is continued by the developed nations for the last many years, so there are different models of outsourcing can be seen, types of these models have been developed according to specific business needs of the different companies respectively. Commonly there are few models , which are followed by the outsourcers for extending their work to offshore companies (web development companies in case of IT & software development) such as Outsourcing to services providing company, Joint venture (JV) offshore outsource model, Build Operate Transfer (BOT) offshore outsource model, opening subsidiary in offshore country.

Usually, outsourcing company uses to select reputed offshore service provider from the decided country after considering all factors affecting the business, under this small & big projects come, which can be continued for a long time. Another type is also project basis but the scope of the work is fixed & defined perfectly, small web development companies & free lancers are hired from offshore country.

Joint venture model refers to establishment of business relations between both companies (outsourcing firm and local firm) in order to take advantages of each other on certain conditions, aim of these kinds of ventures helps both countries to learn & gain from each other and ultimately development of both sides. In the build operate transfer (BOT) type outsourcing, there are two stages of the business, in first stage business can be operated by the local company as similar conditions of joint ventures and in second condition local firm can own the business on certain conditions and can show the ownership according to contract.

Simply, to understand the main basic models followed by both the parties such as outsourcer and offshore service provider are Joint ventures, project basis (commonly seen in web development and IT oriented work) and opening wholly owned subsidiaries in local country, which turns later on to local ownership after certain period of time & conditions.