When exactly did outsourcing start?
many business owners and companies have practiced this set-up for quite some time now even if the concept of outsourcing was not yet popular, and the fact is, outsourcing has been around for thousands of years now. The ancient people understood the need to outsource the service of other people since it would be impossible for them to fulfil their needs all by themselves. Since then there was a start in trading skilled professionals services with other countries in exchange for similar good or service. Thus, outsourcing began.
During the Industrial Revolution that occurred in Europe in 1750 to 1900, there was a great need for outsourcing as there was a high demand for the production of goods. Thus, many companies during that time decided to outsource some of their corporate activities such as accounting, insurance, engineering, legal needs, and the likes to various firms specializing in those fields. Outsourcing was done on-shore since the idea of offshore outsourcing was never conceived yet.
It was in the middle of the 20th century when some companies worldwide welcomed the idea of offshore outsourcing. Developed countries showed a great need for manufacturing at a lower cost thins such as electronic goods, toys, apparel and other stuff to developing countries. There was a rise of employment and levels of income for individual employees due to the fact that they have opened themselves up to outsourcing. Furthermore, they also saw that the levels of education and skills of the workers in lower wage countries has also improved a lot. Infrastructures have been created by developing countries to meet the competencies that are needed by companies to maximize their profits.
Offshore business outsourcing has seen a steady development over the years that have followed. The improvement in the computer technology and the IT revolution played a great part in this outsourcing development. The early 90s saw a number of companies outsourcing their specific business functions such as human resource, data processing, and accounting to offshore locations and even third party companies that can be found within their region. The specific core functionalities still remained under the management of the company.
One of the best business trends as of today is offshore outsourcing. From the early needs of the manufacturing business, outsourcing has evolved and moved into the world of information technology, data transcription, and call centre operations. Outsourcing has also provided more profit for companies because it allows them to spend less for wages and benefits, aside from helping people find job opportunities. Thus, there are some companies who are said to be willing to outsource even their core activities if it would mean they would gain profit more. It goes to show that outsourcing is now a very important part of large companies.