As an entrepreneur, it is always your primary objective to make your business grow and to produce more and more profits in the process. Since the ongoing recession that is affecting every major first world country all around the world, many big companies have turned to outsourcing jobs in order with the hope that they could make that defining step that will eventually make their businesses resurface despite the looming global economic problems.
So what is outsourcing in simple terms?
Here is Timothy Jones, and he has this relatively competent business in America. As with other businesses, competition is cut-throat, and sometimes, you need to lower the price of your product for it to sell - however, it would arbitrarily affect your revenues drastically. To compensate with the cost cut-off he needs to fine tune his business for substantial changes. He decides to venture into offshore outsourcing and contacts an outsourcing company from the Philippines through online connection. He pays a Filipino agent to handle some of the maintenance works for three times less the cost of hiring and remunerating a regular American employee. Because of the tremendous savings he had come up with, Timothy Jones was now able to lessen the price of his product compared to his competitors which has brought in more costumers buying the lower - priced merchandise.
Outsourcing is basically this: furnishing a contract with a third party who will do the job required. The wiktionary defines it as the "transfer of a business function to an external service provider." So what happens is, you are hiring an employee without undertaking the rigorous selection and training process plus the benefits and other added compensation that is required to be given to an office worker. Somebody else has done it for you. All you need to pay for is the actual hours or the output that you are going to receive from your agent. Imagine the savings - without the fantasy that it's too good to be true.
The outsourcing industry has been around ever since the year 1989 and 1990s. In 2004 however, it has become a blazing topic for political debate especially since the onset of recession and massive job losses in the western world at that time.
So basically, outsourcing has affected the country seeking it and also the other country providing it. Outsourcing became a very popular activity among entrepreneurs - and also a practical one at that - that even renowned transnational companies like animation studios, SEO related businesses, and other major brand names have resorted to get employees from India, Philippines, or china.
With globalization on the rise, it's no wonder that developing countries are also competing to level the playing field. But is outsourcing a mere business strategy? Or does it have a rippling effect to the countries taking advantage of it?
So what is outsourcing in simple terms?
Here is Timothy Jones, and he has this relatively competent business in America. As with other businesses, competition is cut-throat, and sometimes, you need to lower the price of your product for it to sell - however, it would arbitrarily affect your revenues drastically. To compensate with the cost cut-off he needs to fine tune his business for substantial changes. He decides to venture into offshore outsourcing and contacts an outsourcing company from the Philippines through online connection. He pays a Filipino agent to handle some of the maintenance works for three times less the cost of hiring and remunerating a regular American employee. Because of the tremendous savings he had come up with, Timothy Jones was now able to lessen the price of his product compared to his competitors which has brought in more costumers buying the lower - priced merchandise.
Outsourcing is basically this: furnishing a contract with a third party who will do the job required. The wiktionary defines it as the "transfer of a business function to an external service provider." So what happens is, you are hiring an employee without undertaking the rigorous selection and training process plus the benefits and other added compensation that is required to be given to an office worker. Somebody else has done it for you. All you need to pay for is the actual hours or the output that you are going to receive from your agent. Imagine the savings - without the fantasy that it's too good to be true.
The outsourcing industry has been around ever since the year 1989 and 1990s. In 2004 however, it has become a blazing topic for political debate especially since the onset of recession and massive job losses in the western world at that time.
So basically, outsourcing has affected the country seeking it and also the other country providing it. Outsourcing became a very popular activity among entrepreneurs - and also a practical one at that - that even renowned transnational companies like animation studios, SEO related businesses, and other major brand names have resorted to get employees from India, Philippines, or china.
With globalization on the rise, it's no wonder that developing countries are also competing to level the playing field. But is outsourcing a mere business strategy? Or does it have a rippling effect to the countries taking advantage of it?
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