Chapter 1: What is Outsourcing?

The term “outsourcing” often times tossed around aimlessly. You will hear this word time and time again regardless of what business or industry you are in. But do you really know the exact definition of outsourcing as it is used in the business world? If you don’t, you are definitely not alone.

In short, the word outsourcing is defined as the management or completion of a function by a third party vendor or service provider. Outsourcing is also referred to as “contracting out” by many people.

Outsourcing began to catch steam in the business world during the 1990’s. It was at this time that business was really starting to boom, and people all over the world were searching for ways to lower their costs, while still being able to get all of their work done.

The term “outsourcing” began to become very popular in the 90’s due to the boom of the internet, and the high tech industry. These companies were just getting started so they were not large enough to handle all of the needs that were required of them. At this point, these tech companies began to outsource projects to experts in the field so that they did not have to hire on new employees to complete them. The first jobs that were widely outsourced in the 90’s were customer service representatives. High tech companies would hire these reps to answer incoming calls by people that were in need of tech support.

On the other side of the spectrum, the companies that actually do the outsourcing are not the only ones to take advantage of this trend. Many people that are experts in their field have found out that they can offer their service to companies all over the world. This has allowed thousands of people to start their own business by becoming a contractor that companies hire when they are looking to outsource internal projects.

Outsourcing has changed the way of doing business forever. It offers many advantages to companies that are looking for expertise in a certain field, as well as to people who are looking to use their knowledge to make a living as a contractor.

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Introduction to Outsourcing (Prev Lesson)
(Next Lesson) Chapter 2: Advantages of Outsourcing

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