| l meaning of the word Outsourcing is: to Obtain | | | | The new outsourcing area is data analysis |
| goods or services from an outside supplier; to | | | | services. Proliferation of internet and the |
| contract work out. This envisages delegation of | | | | widespread use of computers resulted in demand |
| jobs or specific important operations of a business | | | | for data management. The extraction of specific |
| to an outside agency that specializes in that | | | | information from the plethora of data available is |
| activity. Such outsourcing gives two benefits, | | | | a highly skilled task. Fortunately, this can be easily |
| financial as well as the improvement in quality | | | | outsourced. Sometimes outsourcing is used along |
| because the third party is an expert in the | | | | with the term off-shoring. The basic difference |
| subject. However, the day-to-day management | | | | being that off-shoring involves getting the job |
| of the outsourced process rests with the third | | | | done by an agency that is based in another |
| party. This is the essential difference between the | | | | country. Off-shoring gives the advantage of cost |
| traditional purchase of services or goods from an | | | | reduction due to lower labor costs in the |
| outside agency. Outsourcing is common practice in | | | | overseas country and thus increases the |
| sectors like IT, Human Resources, real estate and | | | | profitability of the company that is hiring the |
| accountancy. From the beginning of the 1990s, | | | | outsourcing services. Off-shoring has its own set |
| small, high tech companies found the need for | | | | of detractors and is condemned by some as it is |
| outsourcing as they did not have the financial or | | | | perceived as denying job opportunities to the local |
| manpower resources to run in-house HR or | | | | workers. At the same time it is seen to cause |
| customer service functions. In addition, these | | | | shortages of skilled workers in the host country. |
| functions are highly technical and need specific | | | | There is a lot of debate on both sides of the |
| skills. Hence the story of outsourcing started with | | | | Outsourcing discussion as to who wins and what is |
| these high tech companies. The outsourcing | | | | the best approach. There is no right answer but |
| industry does face criticism especially because of | | | | from an pure global economics standpoint, |
| some instances where call centre staff could not | | | | outsourcing provides natural market mechanisms |
| explain to their customers that they were not on | | | | to the labor pool and in the long run outsourcings |
| the rolls of the original company. They were | | | | jobs should provide the most efficient pricing for |
| sometimes not trained properly or had the | | | | the labor markets. |
| technical knowledge to answer customer queries. | | | | |