Outsourcing - overview
In the past fifteen years or so, outsourcing as a business practice has gained a lot of momentum, small and large corporations are outsourcing for gaining access to specialized expertise and high end resources to achieve cost control as any cost benefit analysis will show favorable results for outsourcing. Today outsourcing is in itself a multi billion dollar business spanning across international borders.
The staff maintained by suppliers outside corporate boundaries carries out important and critical corporate functions. The staff is generally from the third world and is employed at a fraction of the cost. In simplest of words, outsourcing would mean hiring the services of a specialist person, a group, or an organization to take care of one or more critical business functions.
Large MNCs use outsourcing to bring down the operating costs but outsourcing is more popular as a business function among small and start up corporations that lack the resources to employ a specialist staff and/or purchase sophisticated equipments to provide high-end services. Outsourcing allows the outsoursee corporation to concentrate on the more important business functions such as marketing, R&D, etc. while bringing down the operating costs considerably. Outsourcing allows a corporation to turn fixed costs like accounting and customer support into variable costs. Not only that, outsourcing can help a cash stripped company by infusing fresh inflow of cash through sale of assets and reduction in the operating costs.
Filed under: E-Commerce
