Outsourcing was introduced into the business lexicon in the 1980’s as the process that takes place when a company takes a portion of its business and gives that part to another company. It became most popular with IT related tasks being ‘outsourced’ to smaller markets (read developing nations, mostly in remote locations from the in-house facilities of the business owner and at times, outside the continent too) that provided faster, cheaper and equal standard of service required to manage non-core functions with ease. This provided the business owner with more free time to manage other core business functions and also enjoy raised productivity from reduced labor, time and tax costs, which were actually savings in the long run, and soon the phenomenon that defined outsourcing was no longer restricted only to the technology related initiatives.
The answer to lowered cost of operation with higher productivity reports: definition outsourcingDefinition outsourcing that began with tasks like handing over the IT help-desk to a third-party soon came to be much in demand for other industries like medical transcription, payroll responsibilities, HR outsourcing and other such varied and generalized non-technical services. Most of these outsourced services were related to telephone-based customer service department requirements that countries like India and China handled well, for the majority of foreign business owners wanted English speaking, polite and responsive executives that were a-plenty round the clock in both these nations, for a fraction of the cost their counterparts in the home-country of the business would work for. This incentive (of getting labor at reduced, sometimes as much as 50% less than home-ground costs) was the prime carrot dangling before all those looking at definition outsourcing as being the answer to their business expansion needs; for others simply looking to establish themselves in a niche market, this was taken a step further beyond native shores (which is actually what outsourcing is all about) and offshore outsourcing came into the picture.
Advantages of outsourcing: offshoring shows the way to raise the bar on definition outsourcing Many people confuse outsourcing with offshoring and interchangeably use the two terms; however, it is pertinent to point out that these are two distinctly different terms and need to be defined so in order for a newcomer to the concept to fully comprehend the nuances of this world-wide phenomenon in successful business management. So, we begin with definition outsourcing, which is actually nothing more than sharing out certain business functions (beginning with non-core functions) between a JV entity, or a similarly placed outsourcing management consultancy and another company, for activities that will be met in the same country. If these functions to be performed are taken out of the boundaries of the country where the parent company is based, then the process of dividing these business functions is known as offshore outsourcing, which can be Nearshore in nature, if the outsourcer is in the same continent.
To know more about the advantages of outsourcing and defining your business right for the 21st century, drop a line to info@eupath.com and get the latest trends, business models and updates from the leaders of outsourcing themselves!
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