Monday, March 21, 2005

Outsourcing and its causes

Outsourcing is getting the work done from other country due to various advantages. The outsourcing can not only be of software or done by only BPO’s as largely known today, but also in various other businesses. The various causes that has lead to increasing trend toward outsourcing has been due to the following reasons:
· Wages
· Communication
· Transportation
The most prominent among them being getting work done at a low cost and from specialized personnel. This has also lead to Brain Drain, which does not focus on just the IT phenomenon, though it continues to be one of the more prominent examples because of recent media coverage of outsourcing. Thousands of kilometers of fiber optic cable and high bandwidth connections laid during the boom years have united much of the world in high-speed connectivity. Relentless growth in storage capacity and high-speed transmission (digital scanning is currently at 200 pages a minute) has meant that anything can be digitized and sent anywhere for processing.
The main disadvantage of outsourcing has been the loss of the jobs of the people in their own country. The labor class is worried more often than corporate executives, who run the risk of losing their jobs as a result of this global shift of products and services.