Outsourcing refers to an organization that contract with another company to deliver services or products or advices that might otherwise be done in-house. Many large organizations worldwide now outsource functions such as customer services, e-mail services, and payroll transactions etc to the developing countries or inside the country to cut costs and increase efficiency. These functions are handled by specialized companies in the respective areas.
Why companies outsource? There are many reasons behind this. Firstly, organizations do not want to invest its efforts and resources in the non core areas and secondly, and more prominently, to cut costs.
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Outsourcing also enables organizations to concentrate on other businesses and strategic matters while getting rid of the non-strategic non-core issues like customer servicing etc. What it means, management resource which was freed to some extent as the responsibility of some deliverables lie on the outsourcing partner, they can be better utilized for more meaningful functions.
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