Outsourcing – A Management Technique...

Outsourcing – A Management Technique   Outsourcing is a usual practice among different organizations and is a one of the element of the organizational strategy.  Most of the organizations these days outsource some of the functions they used to perform themselves. Outsourcing is when any operation or process that could be (or would usually be) performed in-house by the organizational employees is sub-contracted to another organization for a substantial period. The outsourced tasks can be performed on-site or off-site. By outsourcing, the organization uses third parties to perform noncore activities of the organization. Contracting third parties enables the organization to focus its efforts on its core competencies. Third parties that specialize in an activity are likely to be lower cost and more effective, given their focus and scale. Through outsourcing, the organization can access the state of the art in all of its operational activities without having to master each one internally. The concept of outsourcing came from the American terminology ‘outside resourcing’, meaning to get resources from the outside. The term was later used in the economic terminology to indicate the use of external sources by an organization for some of the activities in its functioning. As per James Brian Quinn of The Outsourcing Institute, outsourcing started with organizations outsourcing physical parts. Now the big shift has been to outsource intellectually based service activities like research, product development, logistics, human relations, accounting, legal work, marketing, logistics, and market research. If an organization is not best-in- world in doing something and is doing it in-house, then it is giving up the competitive edge. In such a case the organization can outsource to the best in the world, up the value, and lower the cost. There are three major categories of motivations for outsourcing namely...