What is Outsourcing?
Outsourcing - A company purchases a product or process from an outside supplier rather than producing it in house. Outsourcing is subcontracting a service, such as product design or manufacturing, to a third-party company. Outsourcing became part of the business lexicon during the 1980s.
Note - Subcontracting - A company contracts an outside supplier to produce a product or process to the company specifications.The manufacturing process is controlled and owned by the company In clear text...
Outsourcing = Subcontracting
Generally outsourcing can be defined as - An organization entering into a contract with another organization to operate and manage one or more of its business processes.
The decision whether to outsource or to do inhouse is often based upon achieving a lower production cost, making better use of available resources, focusing energy on the core competencies of a particular business, or just making more efficient use of labor, capital, information technology or land resources. It is essentially a division of labor.
Reasons for Outsourcing
1. Cost savings
2. Focus on Core Business
3. Improve quality
6. Operational expertise
7. Access to talent
8. Capacity management
9. Catalyst for change
10.Enhance capacity for innovation
11.Reduce time to market
Outsourcing to India…Beyond Information Technology
Conducting quality control
Testing or other analytical services associated for an industrial site, such as a chemical plant, refinery, consumer product, corporate research & technical center, medical, food processor or other business.
India is the most preferred outsourcing destination
Workers are paid peanuts
India has gained confidence of global corporations by exporting high quality brainpower. More than 80% U.S. companies chose India as their most favored destination for outsourcing. It is now an IT superpower.
Outsourcing to India
ITES : Information Technology Enabled Services
Software development, Data entry, Programming,
Web development services
BPO : Business Process Outsourcing
Medical Transcription, Call Centers
KPO : Knowledge Process Outsourcing
LPO : Legal Process Outsourcing
India tops global outsourcing nations list
-Liau Yun Qing, ZDNet Asia Thursday, October 22, 2009
India continues to top the list of outsourcing nations, with six Indian cities in the top 8 outsourcing destinations, according to a global study.
BPO – Business Process Outsourcing
Business Process Outsourcing (BPO) is the delegation of one or more IT-intensive business processes to an external provider that in turn owns, administers and manages the selected process based on defined and measurable performance criteria. Business Process Outsourcing (BPO) is one of the fastest growing segments of the Information Technology Enabled Services (ITES) industry.
Business process outsourcing in India
The business process outsourcing industry in India refers to the services outsourcing industry in India, catering mainly to Western operations of Multinational Corporations (MNCs).
As of 2008, around 0.7 million people work in outsourcing sector (less than 0.1% of Indians). Annual revenues are around $11 billion, around 1% of GDP. Around 2.5 million people graduate in India every year. Wages are rising by 10-15 percent as a result of skill shortage.
Note : As of 20 May 2008 all Indian on-shore workers in the UK and EU are now entitled to the full wage and benefits packages enjoyed by their European counterparts.
Different Types of Services Being Offered By BPOs
Customer Support Services
Technical Support Services