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What is IT outsourcing?

Updated: 10/24/2022
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Definition: Outsourcing of IT processes - this may range from infrastructure, to software development, maintenance and support. Definition: Outsourcing - is subcontracting a process, such as product design or manufacturing, to a third-party company The concept of taking internal company functions and paying an outside firm to handle them. Outsourcing is done to save money, improve quality, or free company resources for other activities. Outsourcing was first done in the data-processing industry and has spread to areas, including telemessaging and call centers. Outsourcing is the wave of the future. The definition of outsourcing, basically started in the late 80's, is certainly correct. frequently, the exact operations (people, equipment, etc.) were sold to an outside party to run. So in data processing for example, the entire computer department became owned/employed by say IBM who ran it at a fixed cost, or all accounting functions were taken over by an outside firm for a specified fee. It was thought the original company didn't have to deal with employee issues, benefits, etc. I would dispute it is the wave of the future. Like many ideas the promise frequently didn't live up to the reality. Many companies are bringing back in house the outsourced functions after finding: Others don't operate any cheaper, and are frequently more expensive. The loss of direct control over who handles their affairs, the caring of those people about the company, and effect on other stakeholders, wasn't worth it and was even a detriment. (For example, many of the customer service centers outsourced to India are being brought back as customers are unsatisfied, opportunities to benefit the company in accounting processes weren't pursued - things like a new report was only done at a high direct cost, etc.)

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