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WHAT IS OUTSOURCING?

2017-04-03 03:08:05 Posted by Admin GOS

What is Outsourcing ? and What is the impact for a country ?

Outsourcing is a new vocabulary in the business world since the 1990s (Indrajit, 2004: 1). Nowadays outsourcing is a working system that is commonplace in the company of domestic public and private. According to Maurice Greaver in Muhammad Faiz (2005: 3) states that outsourcing is the act of diverting some of the activities of the company and the decision to other parties (outside provider), where the action is bound in a contract of cooperation. Some experts and practitioners in Indonesia define outsourcing as an act of delegating daily operation and management of a business process to outside parties (outsourcing services company).

Meanwhile, according to Muzni Tambusai in Fais (2005: 3) outsourcing is passing over one or some part of business processes to a third party.

According to stakeholders and business practitioners all over the world, outsourcing is the most efficient way to reduce costs.

The reason companies outsource their activities are :

these are partially why outsourcing may prove to be a powerful tool for economic growth.

How It Affects the Economy

The 20th century was always associated with the growth of science, technology, as well as human growth. By 2020 the population is estimated to reach 7.675 million, 11 percent higher than in 2010.

and 52% of them will occupy the middle social class. 1,400 million more than in 2010 and 54% of the middle class will be in Asia. The growth process will continue and it will attract foreign companies to invest their capital in Asian countries

the above matters will be raised at all levels of consumption of various fields such as healthcare, technology, education, and other industries that will multiply the number of workers required up to 67% only in Asia while Europe has only 1.8% figure.

Indian IT offshoring services alone grew 19%, to $40 billion, while sales of business process outsourcing (BPO) services, such as call center operations, grew 15% to $13 billion.

Officials at NASSCOM, a trade group which represents Indian outsourcers, said part of the gains were due in part to concerted efforts by India's tech industry to move beyond commodity services like infrastructure management and application maintenance into higher margin areas, such as consulting and targeted services for industries like finance and healthcare.

"Indian IT-BPO firms have matured from being service providers to strategic partners to their customers--highlighting their importance in enabling growth of customer businesses," said NASSCOM president Som Mittal, during a press conference to announce the numbers.

To conclude, outsourcing proving to have an important role in third world economy development including ASEAN countries such as Malaysia and Indonesia.

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