Globalisation in India
Join now to read essay Globalisation in India
INTRODUCTION
The idea of outsourcing has its roots in the “competitive advantage” theory propagated by Adam smith in his book “The wealth of Nations” which was published in 1776.Over the years, the meaning of the term Outsourcing has undergone a sea -change. What started off as the shifting of manufacturing to countries providing cheap labor during the Industrial Revolution, has taken on a new connotations in today scenario. In a World where IT has become the backbone of businesses worldwide,outsorcing is the process through which one company hands over part of its work to another company, making it responsible for the design and implementation of the business process under strict guidelines regarding requirements and specifications from the outsourcing company.
DEFINITION
Business Process outsourcing is the act of giving a third-party the responsibility of running what would otherwise be an internal system or service. For instance, an insurance company might outsource their claims processing system or a bank might outsource their loan processing system. Other common examples of BPO are call centers and payroll outsourcing.
Business Process Outsourcing-Concepts
Outsourcing:- It is often defined as the delegation of non-core operations or jobs from internal production to an external entity (such as a subcontractor) that specializes in that operation.
Offshoring:- It is defined as relocation of business processes (including production/manufacturing) to a lower cost location, usually overseas.
Nearshoring:- It is a concept for the form of outsourcing in which business processes are relocated to cheaper, yet location which are geographical nearer.
When to outsource
When you are losing focus on your core business because you are too busy handling operations.
When you are facing a time, money and human resource crunch.
When you have mission-critical project that needs all your time and energy, plus specialized skills, which arent readily available.
When you have got to be the first into the market to gain the edge.
Benefits of Outsourcing
Cost advantages
Expansion in business
Get access to specialized services
Concentrate