As decades start to pave way for global transformation, today’s generation has witnessed countless technological advances and strategic economic approaches to suit the complexities of the modern world. Truly, man has proved himself ingenious in adapting to the difficulties he encounters in any field to which he engages himself with. And business is no exception.
In the past few years, outsourcing has become a well-known buzz word in the business industry. However, unless you are a business person or had some orientation in economics or business administration, you probably have no idea what this word is.
Outsourcing is the handing over the tasks or jobs from internal production to an external unit. In recent times, it has preferred the employment of staff overseas where salaries are markedly lower. Nonetheless, buying services from a source provider can not be considered outsourcing. Outsourcing always constitutes a significant degree of interpersonal information exchange, organization and trust.
Outsourcing traces its origin way back 1940’s, during the boom of the textile industry in the United States. Yet, its name got the attention of large-scale business industries when Ross Perot established the Electronic Data Systems in 1962. For years, designing, manufacturing and retailing firms paid for their management competence in information technology to aid in reaching their business objectives. Thus, outsourcing companies serve as a branching unit of these firms responsible for managing a segment of business.
After over forty decades, outsourcing remains not only as a business stabilizer but also as an economic stimulant. Aside from aiding in performing business tasks, it also provides employment opportunities for countries with stiff job markets. At present, most international outsourcing firms principally comprises trade in services. International companies use outsourcing as a deliberate method which allows them to provide services to customers or other manufacturers in their home markets while using overseas staff whose labor is priced lower.
As outsourcing becomes broader in scope, more and more benefits are brought about such as enhanced specialization and more extensive markets. These advantages are evident to both the developing countries providing labor services and the developed countries that purchased them.
At present, outsourcing had escaped its stereotype purpose as an accounting support, which was the trend before. It has now invaded wider extents, such as data analysis, IT operations, engineering design, legal support services, art, animation and editorial work, and software development.
Apparently, outsourcing brings clear and substantial benefits to the global economy. Beyond doubt, outsourcing has been a fundamental component of the global value chain schemes that have been made possible by technological advances and competitive markets. Hence, man’s conscientious efforts had once again succeeded in providing an economic tonic which could save many country’s dying economy— outsourcing.
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