Outsourcing is the act of delegating an organization’s internal activities and to some extent the right to decisions to the third party (service vendors) as per specified in the contract. Outsourcing is a tool, in which the vendor is responsible for certain jobs outsourced by a company, in return of a price for the goods or service provided by it. This option is exercised majorly because to cut operation costs of a company and focus on its core competencies. It is basically a contract between two companies or concern in which one is getting its business process outsourced from another company offering such services.
Outsourcing can be divided into several steps to have a more vivid understanding. The key to successful and effective outsourcing is the way its planned and carried out. Outsourcing involves various decision making activities as in deciding the work to be outsourced, deciding the country of outsource, compay to which it should be outsourced and lots more. This can be further illustrated and clearly understood by bifurcating it into various stages.
Outsourcing has become a essential tool for every business to improve their core competency and survive in this fast world of globalization where every organisation is trying to maximize their efficiency. Today the organisations need to recognise not just the benefits that can be derived from outsourcing but also the value that it adds to the company’s real assets which are its shareholders, customers and the economy in which the company is embedded in.
India ranks as the fifth largest economy in the world with a GDP of USD 3267 trillion (2008) lagging just behind European Union, United States, China and Japan (www.cia.gov). India is the second largest when it comes to population with more than 1200 million occupants over an area of 3,287,590 sq. km. India has recently emerged as a hot destination for the IT outsourcing. But the history of the IT outsourcing in India dates back to 1994 when the... [continues]
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