We have come across names of big technology companies like Accenture, IBM, Microsoft outsourcing some of their departments to countries like China, Russia and India. Bigger companies have been taking advantage of outsourcing for some years now. This is the only way they can keep ahead of their competitors. "If we don't remain competitive, we wont exist", in the words Gail Kelly, chief executive of St George's Bank which just sent 76 computer services jobs to India.

Small to medium businesses are starting to feel the pinch. Not only are they competing with bigger and established companies, but their IT budgets are escalating. The emerging trend is the popularity of outsourcing or multi-sourcing by small to medium sized companies.

There are several ways in which a small business owner can save money. One of the ways is the use of online marketplaces. There are online market places which have made outsourcing a small portion of your business easy. Small tasks like accounting services, programming, creating a website, graphic designing, telemarketing can be given to individuals who are working from home in their own country.

Outsourcing no longer has to be to just countries like India or China. There are several freelancers who are willing to work for competitive prices and they come from countries as varied as Canada, UK, US among others. Getting a service provider from an English speaking country reduces time spent on communication.

Tips on what to look for in a good vendor

1. Decide on the budget you are willing to set aside for the task

2. Have a business plan which states exactly what you want done

3. Break the work into sections on a weekly or fortnightly basis so you can measure what has been done

4. Decide where you want the vendor to be based, near your home country or anywhere in the world (helps in terms of time zones, language)

5. Look at previous work examples done by the vendor

6. A lot of the online marketplaces have a rating system where the vendor is rated by previous employers

7. Reference validation will be done by some of the marketplaces

8. You can compare the rates between several vendors before deciding on the right person for you

9. Decide whether you want to deal directly with the vendor or whether you want to use the services of the marketplace. Some of them provide an escrow system

10. Last but not the least, communicate with the vendor on an on-going basis to see if expectations are being met

Offshoring is here to stay and as consumers are faced with more choices, the companies need to keep up with the competition by cutting costs and being more innovative.