Outsourcing a strategy to exploit cheap labor

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Outsourcing could be stated as a procedure in whichare handled after this process. ‘Centralization’
there is usually subcontracting to a third partyand ‘Standardization’ is emphasized to
company. The plan is basically adopted to reduce theimplement SLA (Service Legal Agreement) and to
cost and make the best out of the available resources,reduce the TCO (Total Cost Ownership).
technology and capital. 
                7.      Agreement is executed and goes on for
                               the period of contract.
The ultimate aim of outsourcing is to increase 
employment in a developing country and improving the8.      When the contract is about to end,
living standards of the working class. But the ITtermination can take back the services or transfer
operations in the past few years have suffered due tothem to another supplier.
the whole idea of outsourcing. There have even been 
instances like McDonald's drive through windowsWhat are the reasons for outsourcing?
speakers and order boxes being manned by individuals 
that are not even in that building or for that matter in·         Improving quality
the same country. Many of the infomercials have tele·         Expertise in operation
calls to be attended to and these are handled by·         Benefit from tax
outsourcing to India. Strong grounding in the English·         Capital Venture
language makes it cost effective. However, one·         Reduction in marketing Time
cannot deny the fact that outsourcing is important and·         Commodification
more of a helpful tool.·         Management of capacity
 Â Â Â Â Â Â Â Â Â Â·Â Â Â Â Â Â Â Â  Improvement of quality
Outsourcing·         Catalyst for change
 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â·Â Â Â Â Â Â Â Â  Talent access
 ·         Knowledge and contract
1.      Strategic level decision followed by·         Restructuring and saving cost
approval from the board is required for carrying out·         Focusing on the core business
outsourcing techniques. Decisions are processed with 
a make-buy analysis.Activity Behind outsourcing
 Â Â Â Â Â Â Â 
2.      Referred to as RFP it takes place throughFirms have responsibility to handle new requirements
bidding. The innovative ideas and the creativity of theof the market and utilize resources efficiently. R & D
suppliers may be used to judge their proposals.work might be outsourced to research organization at
 contract.
3.      Response of the suppliers and the 
requirements of the clients are analyzed and downThis benefits the end customer, company choosing the
selection is carried out which involves selection ofoutsourcing to the investors and everyone in the
suppliers until a few remain.outsourcing location.