Essay on the Meaning and Definition of Outsourcing of Services



Outsourcing is the latest trend in today's business world. "Business process outsourcing (BPO). is the act of transferring some of an organisations repeated non-core and core business processes to on outside provider to achieve cost reduction while improving service quality"

In traditional business environment, people performed their whole work themselves. Every one produced goods & services for his self consumption. But, in today's modern business environment goods and services are produced for exchange. Therefore there is need for specialisation by which individuals can get good quality products in large scale.

Thus outsourcing helps businessmen, manufacturers and customers to get specialised products and services, which may be in the field of accounting, communication, advertising, courier etc.

Thus in a nutshell outsourcing can be termed as the process of obtaining specialised services from specialist people.

Nature of Outsourcing

1. Getting the task done from outsiders

The work is outsourced to specialised agencies or individuals who perform the task for a fee.

For ex. : Repair work, construction work, carpentry etc.

2. Quality output

The outsourcing of works will help the organisation to get quality performance; as the work is entrusted to specialists.

3. Better Quantity

Outsourcing helps to improve the quantity of products with better quality.

For ex. : A specialised accounting firm can serve better than relying on company's accountants and clerks.

4. Business expansion

Outsourcing process links pawing business to a range of state- of-the-art services and resources. Through outsourcing, the business can venture into more profitable areas and expand its base.

5. Statandard of living

They provide best service to the people. In the present scenario, every individual would like to avail maximum opportunity of his precious time. This prompts him to use specialists for his needs, which provides better standard of living.

Purpose of Outsourcing

1. Development of business

Every businessman tries to become distinguished from others, by providing standard and specialised quality products. When once this objective is achieved, he can expand his business.

2. Satisfaction of works

Customers wants are unlimited. Therefore the manufacturers should cater to this unlimited demand by outsourcing the services.

3. Better quality Product can be produced through outsourcing.