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Out Sourcing Work
History of Outsourcing -
Many organizations today are making the decision to outsource. In
today’s global marketplace outsourcing has made itself accessible to
many organizations on a national and international level. Outsourcing
refers to getting things done from out - house instead of getting them
done in - house. History of outsourcing is as old as the history of
mankind. Since the individual started to form groups, small communities,
and societies, the outsourcing began. The decision to outsource is
often made in the interest of lowering firm costs, redirecting or
conserving energy directed at the competencies of a particular business,
or to make more efficient use of worldwide labor, capital, technology
and resources. Fundamentally outsourcing is a term relative to the
organization of labor within and between societies.
Outsourcing
- Outsourcing involves transferring or sharing management control and /
or decision - making of a business function to an outside supplier,
which involves a degree of two - way information exchange, coordination
and trust between the outsourcer and its client. Such a relationship
between economic entities is qualitatively different from traditional
relationships between buyer and seller of services in that the economic
entities involved in an "outsourcing" relationship dynamically integrate
and share management control of the labor process rather than enter in
contracting relationships where both entities remain separate in the
coordination of the production of goods and services. Business segments
typically outsourced include information technology, human resources,
facilities and real estate management, and accounting. Many companies
also outsource customer support and call center functions.
Benefits of Outsourcing –
Outsourcing, as the term is typically used in economics, is not
necessarily a job destroyer but rather a process of job relocation and
may not impact the net number of jobs in a nation or in the global
economy. Outsourcing is also successful in increasing product quality
and / or substantially lowering firm and consumer costs (e.g., increases
the quality to cost ratio). Because outsourcing allows for lower costs,
even if quality reduces slightly, this is sometimes the case,
productivity increases, which benefits the economy in the aggregate. Two
of the major advantages that today’s organizations can expect to obtain
through outsourcing include the ability to purchase intellectual
capital and to lower costs. Overall outsourcing is viewed for its
- Economics
- Quality of Service
- Distribution of Workload
- Cost Effective / Cheap labor
- Productivity
Overall
outsourcing is viewed by many organizations as a strong business tactic
that ultimately is a superior economical approach to developing
products and services or rather a process of job relocation with a basic
need of improving the bottom line of the concern company. Outsourcing
can also present advantages to "Developing" countries and benefits from
the patronage of companies that outsource to them - in terms of
increased wages, job prestige, education and quality of life.
Outsourcing is a form of international trade. |
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