Outsourcing

Outsourcing is a term used in the field of business, among entities and business companies and it means to deliver business processes or a part of them to a third party to be contracted on and this process could lead to great changes in the business organization such as moving the company's main assets and staff to another company, the contracting third party. This process is meant for the company welfare as it helps increase profits of the company due to the activities of the third party in marketing and procurement. The outsourcing process could be made as to deliver responsibility to a local company or to a foreign one, off shoring is sometimes included in such a process as well as relocation from one country to another. Outsourcing and off shoring depend mainly on the savings that belong to low labor rates. Outsourcing depends sometimes on online technologies which enables businessmen to manage their work virtually such as the business of designing websites and managing them as all details of business can be managed online which saves a lot of human resources costs. You might ask a question which is why companies do such an outsourcing practice for its business? The answer is included in the fact that the company here seeks reducing costs as getting rid of taxes, costs of high energy machinery and human resources costs. United States companies are the most companies to get benefits from outsourcing as U.S rates and taxes are known to be very high. The opposite of outsourcing is insourcing which means to bring processes for the company by a third party which could be a company and it sometimes includes vertical integration. When a company has a sort of shortage in skills or experiences in a specific business part, it is said that outsourcing can help improve the status of the company regarding that part of business. Outsourcing must follow an environmental policy so as to keep environmental standards on a good acceptable level. Outsourcing has worked to level what is known as global inequalities which are related to what outsourcing lead to of industrialization and deindustrialization.