Outsourcing in Organization
Outsourcing could be defined as the practice in which an organization makes the contract for internal business processes to a third party organization. In other words, outsourcing could be defined as the process of transferring a portion of business works or operations to the outsider organization rather than completing or performing that operation or activity internally. It is generally used by the businesses to reduce the cost of their business operations and to focus on the core business activities. The contract in outsourcing process could be both at domestic and international level.
On the other hand, off-shoring could be defined as the process in which an organization performs its business activities from different country. In outsourcing, an organization does not need to establish production facilities as this responsibility is given to third party, while in off-shoring, a firm requires establishing its manufacturing or production facilities in other countries from which the organization wants to develop its products or services. Off-shoring is used to take the benefits of competitive advantages of an economy such as cheap labour cost, availability of resources etc, while for outsourcing, focus on core business practices is the main reason.
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