The increasing practice of offshore outsourcing by companies is not a new phenomenon. The basic assumption that we all have is that such a decision is taken as a measure of cost reduction. Let’s understand the reason behind companies resorting to this option.
What is offshore outsourcing? It is the practice of hiring an external organization to perform some business functions in a country other than the one where the products or services are actually developed or manufactured.
This can be of four types – Information Technology Outsourcing (ITO), Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO) and Offshore Software Development. Companies usually adopt this when there is a huge wage difference between the home and offshore country, the job can be telework and requires high degree of information can be transmitted over the internet and is repetitive.
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