Tag Archives: outsourced service functions

What is Outsourcing?

Posted on June 28, 2013

Is your business looking for skills or expertise that doesn’t exist within your organization? If yes, then the answer to your problems is outsourcing.  The meaning of outsourcing is simple – going OUT to discover the SOURCE of what you need.  Most businesses nowadays outsource in order to address the needs of their customers, both external and internal. While external customers ultimately buy a company’s services or products, internal customers are a firm’s own shareholders and employees. With the concept of outsourcing a company can obtain payroll services as well as the production of machine parts.

How did outsourcing begin?

Outsourcing can trace its roots back to large manufacturing organizations which engaged outside companies to develop the special components that they required for their products. For instance, in the past, automakers hired external companies to develop components for their air conditioning units, sunroofs and sound systems. In some special cases, automakers even moved entire factories to foreign locations, where they could access special skill sets at a lower cost.

However, in recent years, there has been a big shift towards Service Outsourcing, which refers to the practice of companies engaging outside business firms to help them with specialized work.

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