The History of Outsourcing - What You Can Learn From the Past
The term outsourcing is a word that we get to hear a lot nowadays especially in business discussions.
But do you know that the concept is not really new.
Companies who are currently outsourcing or want to take advantage of this strategy would benefit from knowing the history of outsourcing.
As they say, experience is a great teacher and what better way to learn than from the experience of others.
If you are interested to know about the history of outsourcing then you have come to the right place.
In this article, you will learn how outsourcing started as a business strategy and how it has benefited companies in the past.
You will gain a sneak peak of sorts at the future of outsourcing as this article makes a projection of what lies ahead.
If you are a business individual then it is highly advisable that you read this article in its entirety.
The beginning of outsourcing can be traced during the latter part of the 20th Century when companies began to contract out some of the smaller aspects of their business to companies that provide specialized services.
Before outsourcing was implemented, business organizations handled all of the components of their businesses themselves.
Everything, from the sourcing of raw materials to manufacturing and shipping finished products and even selling them were taken cared of by the organization.
This all in one attitude in business took its toll for the different companies.
The persistence of many companies to continuously run business in this manner led to closure and bankruptcy Such a model, especially when placed in a highly competitive environment is very inefficient.
The inefficiency lead to resources such as time and money being wasted until it came to a point where the company cannot sustain itself anymore.
Clearly, something has to change and a new model must be put in place.
Learning from the errors of their earlier counterparts, companies during the 1970s and 80s sub contracted some of the tasks in their businesses such as payroll, accounting, human resources and data encoding to specialized organizations and thus outsourcing as we know it began.
Organization started to outsource jobs to local companies but as the world entered the era of globalization, ushered in with the help of developments in communication such as the Internet and telecommunication technology, organizations from developed countries turned to companies from developing parts of the world for the manpower needs.
Before, the top outsourcers where companies from the manufacturing business.
Currently though, information technology top the list of industries that utilizes outsourcing to save money and meet their business goals.
It is also estimated that half of the top 5,000 companies in the U.
S.
are outsourcing some or majority of their business processes.
The Philippines, India and China are just some of the top offshore service providers primarily because of the cheap yet highly skilled workers that can be found in these countries.
There is also no sign that the practice will end soon as proven by the increasing number of companies that outsource every year.
May this short history of outsourcing provide you with a greater understanding of outsourcing.
But do you know that the concept is not really new.
Companies who are currently outsourcing or want to take advantage of this strategy would benefit from knowing the history of outsourcing.
As they say, experience is a great teacher and what better way to learn than from the experience of others.
If you are interested to know about the history of outsourcing then you have come to the right place.
In this article, you will learn how outsourcing started as a business strategy and how it has benefited companies in the past.
You will gain a sneak peak of sorts at the future of outsourcing as this article makes a projection of what lies ahead.
If you are a business individual then it is highly advisable that you read this article in its entirety.
The beginning of outsourcing can be traced during the latter part of the 20th Century when companies began to contract out some of the smaller aspects of their business to companies that provide specialized services.
Before outsourcing was implemented, business organizations handled all of the components of their businesses themselves.
Everything, from the sourcing of raw materials to manufacturing and shipping finished products and even selling them were taken cared of by the organization.
This all in one attitude in business took its toll for the different companies.
The persistence of many companies to continuously run business in this manner led to closure and bankruptcy Such a model, especially when placed in a highly competitive environment is very inefficient.
The inefficiency lead to resources such as time and money being wasted until it came to a point where the company cannot sustain itself anymore.
Clearly, something has to change and a new model must be put in place.
Learning from the errors of their earlier counterparts, companies during the 1970s and 80s sub contracted some of the tasks in their businesses such as payroll, accounting, human resources and data encoding to specialized organizations and thus outsourcing as we know it began.
Organization started to outsource jobs to local companies but as the world entered the era of globalization, ushered in with the help of developments in communication such as the Internet and telecommunication technology, organizations from developed countries turned to companies from developing parts of the world for the manpower needs.
Before, the top outsourcers where companies from the manufacturing business.
Currently though, information technology top the list of industries that utilizes outsourcing to save money and meet their business goals.
It is also estimated that half of the top 5,000 companies in the U.
S.
are outsourcing some or majority of their business processes.
The Philippines, India and China are just some of the top offshore service providers primarily because of the cheap yet highly skilled workers that can be found in these countries.
There is also no sign that the practice will end soon as proven by the increasing number of companies that outsource every year.
May this short history of outsourcing provide you with a greater understanding of outsourcing.
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