Learning From The History Of Outsourcing

When did outsourcing begin?

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. People during the ancient times understood the importance of outsourcing as they themselves have realized it is impossible to meet their needs on their own. Moreover, some people with specialized professions also started to trade their services with other nations in exchange for goods or an equal service, too. That was when outsourcing was born.

There was a high demand outsourcing the production of goods back in 1750 to 1900s during the European Industrial Revolution. Since then many companies have decided that they should outsource their business specific functions such as legal needs, accounting, and insurance to third party companies specializing in the said fields. However it was done within the limits of the country since offshore outsourcing is not yet open during those times.

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. Companies started to be more open to the concept of outsourcing since it helped developing countries increase employment and also their levels of income. Education levels and the skills of workers in developing countries has dramatically improved. Developing countries' governments have started creating competitive infrastructures that is necessary for the company to maximize their profits.

The years that followed saw the fast development in the field of offshore business outsourcing. Two facets played a major role in the development of outsourcing, that is IT development and computer technology. Companies started outsourcing their business specific functions to offshore and third party service providers such as human resource, accounting, and data processing. The specific core functionalities still remained under the management of the company.

Offshore outsourcing is now one of the best business concepts. 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. Basically, outsourcing provided not only employment for people in the developing countries, it also help the companies themselves to even hit a greater profit since they could very well save on the cost of employment wages and benefits. Many companies are now adhering to outsourcing their core business activities just to ensure that they would gain more profits from doing so. Needless to say, outsourcing has really become an essential part of a large organization.

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