Even Smaller Firms Turn to Offshoring

While big companies were the first to outsource requirements offshore, smaller firms are now following suit in buying services from countries like India.

Which only proves that the benefits gained from outsourcing cuts across all businesses regardless of size.

According to a recent story from Businessweek, smaller outsourcers have become somewhat of a niche market for service providers as shown by the number of contractors posting their services online.

Thanks to the Internet, smaller firms can find services anywhere from software programming to graphic design.

As with much larger multinational companies, smaller companies have also begun offshoring not only routine tasks like encoding or call center work but also key functions like marketing.

This development also benefits the service provider side.

In the last few years, Indian companies like Wipro and Infosys have grown in prominence because of high-profile clients like Lehman Brothers, Sony Corp. and American Express.

But in the past year, many start-ups have sprung up in centers like Bangalore and Bombay that offer short term programming jobs to small US companies.

In Silicon Valley, start-ups are reportedly advised to outsource tasks to save on costs which could otherwise be alloted for R&D.

Smaller service providers scramble after contractual jobs from US comapanies during "peak" seasons in the business.

While some of that may be temporary, most job-watchers now believe small businesses will continue to turn to outsiders even as the economy strengthens.

They face the same relentless pressure to cut prices felt by much-bigger players.