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Outsourcing

In business, outsourcing involves the contracting out of a business process to another party (compare business process outsourcing). The term "outsourcing" dates back to at least 1981. Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always. Outsourcing is also the practice of handing over control of public services to for-profit corporations.

Many American and British managers have already realized that there are substantial savings to be made by outsourcing certain parts of their operations overseas. They say that there are a number of constraints to work with. The first of these is language – there is no point outsourcing if you don`t have professional people at the other end who can speak your language.

If there wasn`t a substantial saving to be made there, the risks would simply overweigh the potential benefits. They say that if you couldn`t get a 50% saving there, then it wouldn`t be worth all the extra costs involved in transferring work abroad. Then there is a political stability factor to be considered. What would you do if there was a major problem in the country you have outsourced to? Outsourcing is a complex decision and you have to weigh the advantages and drawbacks very carefully.

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