Outsourcing Relationship

Outsourcing is the delegation of tasks or jobs from internal production to an external and separate business partner, very much like a subcontractor. By present standards and definition, it became the equivalent of elimination of local staff in favor of staff overseas to countries where salaries are considerably lower. Countries such as India, Bulgaria, Venezuela and Brazil, among others have become forerunners as outsourcing venues.

It was first seen in the data-processing industry and has steadily spread to include telemessaging and call centers. Recognized as an effective means to save money and improve quality, outsourcing has also made it possible for a company to free its resources for other undertakings. Functions that have been previously performed by a company are supplied under contract from a third party. Goods or services are bought instead of producing them internally.

The process may require the transfer of components or large segments of the internal IT infrastructure of the company to an external source as well as staff and other applications. Since it usually applies to a complete business process, there is a degree of managerial control and risk...