What is OffSourcing ?
It is a Kaytek Coined Word formed by merging the two words 'Offshore' & 'Outsourcing'.
It refers to the Sourcing of Both Goods and Services from External Entities (Organizations or Persons) from Locations Outside the Country.
'OffSourcing' can either be Of Manufactured Goods or Professional / Other Services.
This OffSourced Work ( Activity, Task or Process ) can be either tightly Integrated with or Independent of other Work.
Obviously, the less tightly integrated the work ( Activity, Task or Process) is with other components, it is easier to Offsource.
Like any other business initiative, Offsourcing too has some promising positives & potential pitfalls.
Offsourcing helps Cut Costs Satisfy Stakeholders Raise Revenues.
Why is OffSourcing done ?
Two Reasons drive OffSourcing.
Primarily Lower costs due to Currency Rates Arbitrage between developed & developing countries.
Also because Of Large Numbers Of Manpower With Specialized Skills.
As the CEO Of Sun Microsystems says, " The smartest people in the world do not work for you."
'OffSourcing' enables you to leverage external skillsets & low cost resources for your benefit.
It also gives you first hand cross cultural experiences with individuals & organizations in fast growing economies.
Related - What is Outsourcing ? Offshoring ?
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