Offshore Outsourcing

Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the product or service will be sold or consumed. Outsourcing became part of the business lexicon during the 1980s and often refers to the delegation of non-core operations from internal production to an external entity specializing in the management of that operation. The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of worldwide labor, capital, technology and resources. Though often used interchangeably, outsourcing differs from offshoring in that outsourcing is relative to the restructuring of the firm while offshoring is relative to the nation, though the two are not mutually exclusive, especially under conditions of globalization. Fundamentally and historically, outsourcing is a term relative to the organization of labor within and between societies. It can be contrasted with offshoring, in which the functions are performed in a foreign country by a foreign subsidiary. Opponents point out that the practice of sending work overseas by countries with higher wages reduces their own domestic employment and domestic investment.
IT outsourcing, and software outsourcing in particular, is a most effective way to stretch your budget. If you need to have state-of-the-art IT solutions worked out and innovations implemented with less loss, outsourcing may be the only way out. Cutting your costs and upgrading the quality of the services you offer will allow you to concentrate on your core activities and expand the competitive capacity of your business. This is the main reason why an average software development and/or Web development company resorts to outsourcing today. India has become one of the leading outsourcing development centers which caters to the needs and requirements effectively.
"Outsourcing" involves transferring or sharing management control and/or decision-making of a business function to an outside supplier, which involves a degree of two-way information exchange, coordination and trust between the outsourcer and its client. Such a relationship between economic entities is qualitatively different from traditional relationships between buyer and seller of services in that the involved economic entities in an "outsourcing" relationship dynamically integrate and share management control of the labor process rather than enter in contracting relationships where both entities remain separate in the coordination of the production of goods and services. Business segments typically outsourced include information technology, human resources, facilities and real estate management, and accounting. Many companies also outsource customer support and call center functions, manufacturing and engineering. Consequently, a debate has ensued concerning the benefits and costs of the practice as well as how to categorize it as a phenomenon.
Despite the skepticism and angst over outsourcing, this trend has just begun and will accelerate over the next decade. To get some perspective, ask someone that works in the information technology industry how outsourcing has changed their function.

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