Outsourcing Study Guide

Outsourcing Study Guide - Outsourcing is the process of...

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Outsourcing is the process of providing service or information to another company which they could also provide themselves within the company. It refers to how things are done rather than what is obtained from it. It can also be defined as a process in which a company delegates some of its in-house operations/processes to a third party. It is a contracting transaction in which company purchase services from each other while keeping the ownership and responsibility of each company. However, it should not be confused with the term contracting. Offshoring is the shifting of a business or service operation from one country to other foreign countries. This can also be called as moving product manufacturing, service centers or operations to a different country. In some cases, a wholly owned foreign subsidiary company may be established. Sometimes it is defined as “any country other than your own”. Offshore outsourcing is the exporting of many talents or services from more developed countries to the developing countries that haven’t experience the economic growth yet. Most of the services that has been outsourced to other countries is the IT management. There are several issues why this would be a benefit to the developing country, but a drawback to the developed country. Outsourcing and offshoring effects both the US and local economy. Benefits: - The one thing in common between outsourcing and offshoring is that you can save big on every aspect of your business. You don’t have to spend a lot of money and yet you maintain the profit of the business. Like for example, the IT management; a company might outsource its IT management because it is cheaper to contract a third-party to do so than it would be to build its own in-house IT management team. Or a company could outsource all of its data storage needs because it is easier and cheaper than buying and maintaining its own data storage devices. -
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This note was uploaded on 11/14/2011 for the course ECON 221 taught by Professor Ramoo during the Summer '10 term at Diablo Valley College.

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Outsourcing Study Guide - Outsourcing is the process of...

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