In the business plans of most companies, outsourcing often known as contracting out. The outsourcing involves the transfer of work that is used to be done in-house to an outsider third party. Growth estimates of 30 percent per year are not uncommon. One estimates puts the current value of outsourced goods and services around the world. This is to call it a growth industry would be something of an understatement.
Outsourcing does not necessarily imply a move overseas which is called offshoring. Most of the people will think of work that is been shifted to a low-labor cost countries such as India or China. Sometimes in the same block, outsourced work is sometimes done by another company in the same country. Everyone seems to have an opinion on the subject outsourcing, this is also one of those buzzwords that attracts a crowd. All comments was generally fall into two main camps, the one is side calls outsourcing little more than a thinly-veiled attempt to contract out good-paying jobs to cheaper. The second side calls is necessary business strategy that cuts costs and ensures competitiveness and a better quality.
There are kind of work that are commonly outsourced. Certain fields have tended to lend themselves more to the practice than others, name a service, functions, activity or thing that can be carried out, analyzed, manufactured or processed by an outside company and you will have a candidate for outsourcing. Many companies chose to outsource was data processing. Most of Canada’s financial institution have outsourced all. The CIBC inked a $2-billion contact with the HP to provide it with comprehensive Information Technology services in 2002. In 2001, to IBM ,the Laurentian Bank outsourced its Information Technology services to CGI Group and Scotiabank outsourced its computer operations. Information Technology can include infrastructure e-commerce, security and network management, it is not just about data processing.
Human resources is the another frequent outsourcing target, payroll processing, employee assistance programs, recruitment and staffing services, this all can easily be carried out by the third parties that specialize in doing nothing but human resource related work. By proving nothing some companies have become successful on the other hand outsourcing services in a particular field.
Call centers are one of the another familiar example of outsourcing. Most of the multinational companies attract large numbers of customer inquiries that have contracted out the whole division to the third party call centers. A caller may think that they are talking to a company representative in their home town.
Outsourcing has pros and cons, the companies that outsource talk of the savings and efficiencies to be had by moving the non-core. Companies that do nothing although provide a payroll or Information Technology services or debt collection, it will do a better job at a lower cost and to concentrate on what it really wants to be known for, it allow the company. Outsourcing critics stated about the business case for many cases of contracting out just is not there. It will obtained at a lower cost, they admit that when it comes from a worker who may not have the same commitment to the company as an in-house employee.
Business becomes bigger because of outsourcing that is why more companies wants to outsource. Outsourcing helps the industry and economy to become better and better. Most of the people now becomes stable because of outsourcing.
REFERENCE:
http://www.cbc.ca/news/background/economy/outsourcing.html
http://www.wisegeek.com/what-is-outsourcing.htm
