Outsourcing – Nothing New To Modern Society

Many people have claimed the process of outsourcing to be their brainchild. I recently read that someone started an outsourcing business from his garage in New Delhi, India as recently as 1993. Perhaps, he meant ‘business process outsourcing' but even if he did, his claim to the newer form of business can and is disputed. SO far as my memory goes, the process of outsourcing is as old as mankind. Remember your mother sending the laundry to the cleaners? Was that not a sort of “outsourcing”? The drycleaner himself would send the wash load to someone else who would wash, dry, press and return the clothes to him for a charge. This was also “business process outsourcing” at its basic.

What has changed?
In the process of outsourcing, what has changed is the ‘process' of outsourcing. Business process outsourcing has invaded almost every form of businesses in the world. The process of outsourcing, very simply put, is that some business chooses to hire the services of another business to perform a task, such as billing, while the principal company focuses on the more important maters at hand, such as negotiating newer contracts and taking care of business development. The process of outsourcing makes space for a company, reduces the cost of manpower and makes the business more efficient over all.

Many businesses prefer to outsource the business processes that are not the ‘core' feature of the business. Let us consider an insurance company for instance. They will not like to outsource their marketing to a business that specializes in marketing; they will also not outsource their actuary operations to someone outside the organization, as these are operations that could be ‘sold' to competitors of the business. The Insurance Company will, however, outsource the janitorial processes of the organization to a company that specializes in such a service. The janitorial service is not in any way connected to the insurance business process and so there is not danger of leaking information about the company. The insurance company might also outsource other services such as the catering service or the transport service. However many business outsourcing processes are typically processes that relate to functions of the back office and other processes that can be performed over the internet.

Businesses like to outsource their IT Strategy to companies that specialize in such processes and are typically much more cost effective because of the lower costs of manpower and infrastructure these businesses are typically located in developing countries such as India, China the Philippines etc.

Log onto ciotalkradio.com to learn more about how outsourcing can help your business. You can also listen to the pros and cons of business process outsourcing or even sign up for their very informative news letter on the site.