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Practice known as outsourcing Essay

Many companies the world over are choosing to export their business functions to reduce both costs and money therefore increasing organizational efficiency. They hire other companies, which are more specialized in such functions to perform them for them: a practice known as outsourcing. Most outsourcing is done offshore with India being among the world’s leading outsourcing destination. So far it has attracted many I. T and business firms from developed countries with the latest attraction being law firms seeking the cheaper but effective services of India’s labour force.

In recent times in the global market, outsourcing has become popular for many international companies that operate their trade around the world- for them to acquire goods or services rather than those companies producing those services or goods for themselves (Ashley, 2008). According to Timmons (2010), outsourcing is the transfer of various companies’ work to an external or other company or organization that deals specifically with that particular service and the daily management of a business process.

Examples of these services are: legal services, logistics, manufacturing etc. many organizations in the world, particularly in the United States are using outsourcing services in one way or another. Functions normally outsourced by companies are those considered

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non- core to the company itself for instance legal or logistics services. A company in the United States may require a number of services such a logistics, recruitment of new employees and purchase of a variety of screws and bolts. Rather than employing a company lawyer, performing the employee recruitment or manufacturing screws and bolts, this company may outsource those services to other companies specializing in the same (Rick, 2005).

A company that is hired to outsource services or goods on behalf of another is referred to as a third party company/ provider or simply as a service provider. Nowadays, companies the world over have began to employ outsourcing services in their companies as a model for functions such as legal, payroll or data entry. Better efficiency Services that a company out sources from another are usually carried out more efficiently, due to specialization by the service provider, while at the same time enabling the outsourcing company to cut costs. Outsourcing also enables a company to acquire skilled manpower for the outsourced work.

In his book Bragg (2006) declares that: “In recent times, many companies in the United States are able to hire legal services from India and other Asian countries where outsourcing services can be easily accessed and at cheap cost”. The success of many outsourcing companies in India and other Asian countries depends upon a number of factors. First, support from the clients or organization which the outsourcing company is serving. Second, there has to be good communication between the hired outsourcing company and the company which has hired those services.

Lastly is the ability of the outsourced company to handle and manage the services for which it has been hired. Fundamentally, these deals that are entered into by service providers and outsourcing companies can extend for a number of years, sometimes costing the outsourcing firms millions of dollars. Often times, many services that were done internally are outsourced, somewhat turning the service providers into company employees. Outsourcing of legal services in India has grown from an experimental endeavour to global business law, adhered to by many companies around the globe.

The number of businesses dealing in legal outsourcing services increased from 40 in 2005 to more than 140 at the end of 2009 and the revenue is expected to grow to $440 million in 2010 and surpass the $1 billion mark by 2014 (Timmons, 2010). References Ashley, E. (2008). Outsourcing for Dummies. New York: For Dummies publisher. Bragg, S. (2006). Outsourcing—a guide to selecting the correct business. London: John Wiley and Sons. Rick, L. (2005). Business Process outsourcing: the competitive advantage. London. Wiley and Sons. Timmons, H (2010). Outsourcing to India draws western lawyers. The New York Times. Retrieved August 4, 2010.

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