What is Outsourcing

A lot of might have heard the term and might also have related it with only one thing BPO == Call Center.
Where you get paid to chat with people and often to get abused by them.
but this is not the only thing outsourcing means.

This article is intended for students, who are either stepping into the technological industry or are planning to.
I am not addressing the ones who are already educated.

If you look at the word 'Outsourcing' closely, you'll find its 'Out-Sourcing'. Meaning getting something done whose source is outside of your perimeter, or simply say, country. BPO stand for Business Process Outsourcing, and is a business where one country/company asks another to do a work for it, making the services  come from the outside of the company.
That service, or say Business Process, can be anything, ranging from customer service, manufacturing, distribution and more. In the case of customer service, the call center example fits very well, where a company asks another company to serve its customer.

Software development in India is also outsourcing, at least mainly.
One of the biggest company TCS is also the biggest technological exporter of the country, meaning the biggest outsourcing company.
Because these companies work for the clients/companies who are situated in the US/UK and other places.
It is very likely that if you're hired by many of the biggies, you're also involved in outsourcing.

Now, the question is, Why do the international companies want other companies to work for them?
Simple because they get cheap labor in developing countries as compared to their own.
for example, If we take the scenario of US, per capita income of an average US citizen is quite high as compared to an Indian citizen.
So if a company, that is situated in the US, hires an American for the job, it will end up paying more to him, than hiring an Indian, in India.
The work done by both of the people is almost same, but cost is reduced as the US company pays for almost two indians in the same cost it would have been paying an american.

The final software product, or all the communication involved in developing it, is done via the internet, and since internet bandwidth is not a problem with developed countries, they find it almost negligible as a cost factor.

Now, The Fear Factor..
This scenario made most of the US companies ask indian companies to do their work, for they'll have to pay less and earn more. This situation made india gain in various aspects: we got more dollars in our country, we got more people employed. but it almost created a problem over there in the US. companies were now not willing to hire americans to save the cost. and un-employment of skilled US personnel increased. This ended up in rage among the US people and a negative social impact.
as a result, to correct this, the current US president Barack Obama has strong changes in US policies in his mind, and is being seen as a president not acting very helpful to outsourcing.

Why You should know it..
Simply, you'll be in the business involving this, so you should be knowing this.
if outsourcing fails (which really can, as China is leading in it now, beating India), you should have proper plans in mind to tackle it.
Either work for companies, which are product oriented
Or work for companies, who don't outsource, they just do their work .
It's totally up to you.

I hope it would have helped you in any manner.

Thoughts expressed here are totally mine, neither copied, nor influenced

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