Outsourcing & Global Economy

Outsourcing and the Glaobal Economy

Outsourcing is defined as the management of an entire business function by a third party service provider. Outsourcing involve transferring a significant amount of management control to the supplier. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust. Many companies look to employ expert organizations in the areas targeted for outsourcing. Business segments typically outsourced include Information Technology, software devolopment, web design and biological research. The term 'outsourcing' became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own.

Many companies also outsource customer support and call center functions. And "[T]he trend is not surprising." Because "[A]merican companies are under pressure to reduce costs, and foreigners can do a lot of high-tech jobs more cheaply than they can be done here." That's why a lot of americans are losing

their jobs to the foreigners like the people of India and China. And for this reason, american living standards is sinking. But according to Robert Reich "the number of high-tech jobs outsourced abroad still accounts for a tiny proportion of America's 10-million-strong IT workforce." And a large proportion of high-tech jobs that were lost after 2000 will come back in some form when the U.S. economy fully bounces back from recession.

Gecis Global is a pioneer in global outsourcing world and is a big name to contend with. "Expectations generated by the rebirth include passing the US $1 billion mark in annual revenues by 2007 Ð'- 2008 and gain a global workforce reaching 30,000 in number.....[G]ecis, as it was widely known, thrived with the outsourcing boom with offices in Hyderabad, Bangalore, Jaipur, and Kolkata. It branched even further by building sites in China, Eastern Europe, and Mexico."

According to the workers of Gecis in India the 'outsourcing' thing gave them a hope. They see it as an opportunity and do their best to grab it. As the people of India are very poor and their average income is US $300, they were getting less opportunity and were getting ill-paid. But at a time, some american companies came to their country and began to invest. They saw it as an opportunity and grab it. It gave them a new hope. And the ultimate result is surprising.