Define Outsourcing - Defination with Meaning

To define outsourcing in the right way, one has to take into consideration a variety of factors. Outsourcing is the process of shifting/delegating/transferring a service/process/function to a third-parties/external service provider which would otherwise be an in-house function/service/process.

Outsourcing happens for two types of services. One is ITO or IT Outsourcing that involves an external service provider to manage a specific application, including all related activities like server management, networks administration, and software development/upgrades. The other is BPO or Business Process Outsourcing which involves a third party who manages the entire business process, such as accounting, financing, customer support or human resources.

Outsourcing is different from contracting in the sense that in contracting there is no transfer of control where as in outsourcing there is transfer of control. So to define outsourcing in the right way one has to compare it with contracting and sort out this important difference in the transfer of control.

A look at the labor outsourcing statistics would indicate that outsourcing of jobs has increased over the years. But many economists do not consider this as a negative effect of global outsourcing. Instead they are of the opinion that taxes business process outsourcing will help improve the US economy in the long run. Many estimate that for every job outsourced a significant amount of returns gets back to the US economy. But speculations among the US workers seem to be growing by the minute. Recent outsourcing news like ibm outsourcing it, engineering foster wheeler offshore outsourcing, bank of America outsourcing only add fuel to fire. Most workers demand amendment of bills restricting it offshore outsourcing. Along with outsourcing to India other stories that hit the news are it outsourcing to China, outsourcing Thailand, outsourcing Romania and it offshore outsourcing Philippines.



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