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The outsourcing industry has seen a phenomenal growth over the times. What was once the possession of giant business enterprises is now being used by any business that seeks to expand its profit margin and concentrate on its prime objectives. In the last twenty years, there has been a phenomenal shift outsourcing professional jobs from the western countries to other developing countries. With the application of technology, numerous channels of communications have opened up. Earlier the prime mode of communication was postal mails and long distance calls, which by the way got very expensive. Now, with the advent of internet technology it’s all about emails, long distance calls through the internet, instant messengers and so on.
The concept of outsourcing involves delegating tasks of the company’s internal work proceeding to an external entity. It works the same way as a project is distributed amongst sub-contractors. Earlier, the outsourcing process was restricted to the national boundaries of the company. But nowadays the very meaning of outsourcing has become offshoring the job to external service providers based in other countries. Outsourcing can also be defined as the execution and management of a particular business process by a third party service provider that resides beyond the countries boundaries.
History of outsourcing
Though outsourcing is believed to be practiced as early as in 1962, the formal identification as a business strategy came only in ’96. The roots lay in the practice of handing over work to several sub contractors.
By the mid-90s,[link widoczny dla zalogowanych], businesses made use of outsourcing as an effective tool for cutting costs. All the peripheral tasks of a business that were essential but not directly related to the core business objectives of the company were delegated to different service providers. Tasks included data processing, data entry, accounting or even security provisions.
But with time, outsourcing gave way to offshore outsourcing. Companies that earlier hired service providers located within their national boundaries no began looking for vendors in offshore countries. This further reduced costs and expanded their profit margins. Offshore outsourcing can be defined as the relocation of business operations to a lower cost overseas location.
Outsourcing Today
In today’s world, outsourcing can be seen as a major business strategy adopted by companies worldwide. This concept has created many jobs in several countries. As more and more companies offer their services, the scope of tasks has widened. Even engineers and doctors are being outsourced. There are teams that generate weekly activity reports, update them on a daily basis and research out new business leads for you. In addition, peripheral tasks like customer support, technical support and front desk services are also outsourced to offshore countries.
Companies adopt outsourcing for a variety of reasons. The major reason is of course cost cutting and subsequent profit expansion. But along with that by outsourcing certain processes of the business, companies can devote their full attention to their core objectives. Also, the tasks get completed by industry professionals thus enhancing the quality of the deliverables. Other companies outsource tasks that are out of their capacity.