Although terms like outsourcing and offshoring are used without distinction in public discourse, there is a keen technical distinction. Outsourcing refers to the sub-contracting of services to a third-party...
The primary purpose of every business is to make profit. Towards this end, businesses through the ages have used various practices, and discarded many. The factory system was born due to its efficiency, in respect of time, cost and product quality, and thus fostered specialization of work. The industrial revolution introduced many other management and production techniques and processes that have further improved efficiency, the greatest of which was machination and automation. Thus, we notice a historical tendency towards the adoption of better, faster and cheaper processes. Outsourcing is a recent concept that is inspired by the same logic.
Although terms like outsourcing and offshoring are used without distinction in public discourse, there is a keen technical distinction. Outsourcing refers to the sub-contracting of services to a third-party – it is an organizational practice involving transfer of an organizational function. Off-shoring refers to the process of transfer of organizational functions to a different country (‘shore’), whether to a third party or to a branch within the parent company but in a foreign country. Frequently, the offshored work goes to a third-party company nowadays. The logic of outsourcing is indisputable – it saves money, it fosters specialization and better service freeing the parent company to focus on its core competence.
There has been much controversy regarding outsourcing. Opponents argue that it entails job loss in the parent market. However, there is fair consensus that outsourcing is inevitable and is supported by sound economic logic, and the phenomenon of outsourcing will continue for a long time. Outsourcing has helped all types of companies, from IT support services to telemarketing services, from content generation to medical transcription. This section of the webdirectory will guide you to many such outsourcing resources.