Outsourcing
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Outsourcing

Outsourcing has today become a competitive and imperative. The growth of the Internet, customer revolution, rise of mass customization, severe competition etc. has forced the companies to focus on core competencies instead of vertical integration. This means that producers must ideally contract out part or all of manufacturing, assembly, distribution, and support operations.  Outsourcing is defined as the contracting of one or more of a industry’s processes to an outside service provider to help by primarily reducing operating cost and focusing on core competencies. It is an arrangement in which one company provides services for another company that could also be or usually have been provided in- house. In another perspective outsourcing as the contracting out of a company’s non- core, non-revenue-producing activities to specialists. It differs from contracting in that outsourcing is a strategic management tool that involves the restructuring of an organization around what it does best and its core competencies. There are several reasons why outsourcing is becoming so popular. The simplest reason to outsource is to alleviate administrative burdens and focus on strategic areas.As the companies move from non-outsourcing environment to an outsourcing environment the profile of the time spent by the executives on various activities change noticeably.

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