Outsourcing is the practice of obtaining goods and services from a foreign supplier. It consists of assigning a company’s business operations to third parties when there is a shortage in labor or where the cost of labor is too high. It’s also very common to see world class enterprises and global corporations obtaining services or products from other companies based in a different country, region or continent. This is a form of outsourcing called offshoring.
Offshore outsourcing is a significant asset to companies when done properly. It has a major impact on a company’s revenue, delivers significant savings, mitigates risks, lowers operational and labor costs. It helps entrepreneurs expand and gain access to new market areas by taking the point of production or service delivery closer to their end users and capacitates companies leverage into a global knowledge base.
In countries where laws and regulations are strict, outsourcing pay off since companies would be designating difficult responsibilities to these third parties and are in less risk for liabilities; companies can literally dispose of functions that are difficult to manage and control, while still benefiting.
According to experts, this trend will only grow.Companies undertake outsourcing and offshoring for a variety of reasons depending on their vision, purpose and needs. While this may be different from company and suppliers, the results of this practice are visible among some of the leading corporations in the world, where outsourcing and offshoring have become essential practices of today’s business strategies.
