Bianca19

Many of us will ask this question that , what is so great about Outsourcing ? It is done to save money , improve quality or free company resources for other activities. This concept of taking Internal company functions and paying an outside firm to handle them reduces so many problems actually helps a lot to the companies.

Outsourcing was first done in the Data – processing industry and has spread to areas like telemessaging and call centres .

In Data processing , the entire computer department is owned or employed by some company ,lets say IBM, who runs it at a fixed cost , or all accounting functions were taken over by an outside firm for a specific fee.

Outsourcing is a business function involving the transfer of people and the sales of assets to the supplier. The process begins with identifying what is to be outsourced and building a business case to justify the decision . Only once a high level business case has been established for the scope of service will a search engine begin to choose an outsourcing partner.
The decision to outsource is taken at a strategic level and normally requires board approval.

Organizations that outsource are seeking to realize the benefits –
• Cost Saving- Lowering of overall cost of the service to the business .It involves defining quality levels , re- pricing, re- negotiation
• Cost Restructuring – Operative leverage is a measure that compares fixed costs to variable costs .
• Improve Quality
• Knowledge.
• Contract – Service will be provided to a legally binding contract with financial penalties and legal redress
• Reduce time to market.

There are so many advantages of Outsourcing that one tends to go for it . And in today’s world where IT is climbing ladder fast Outsourcing is the need of an hour.

yeeha

But somehow the big financial institution never outsource their internal software needs.

Why?

Because of data secrecy.

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