Outsourcing dates back to the 1960s from where it has grown to different levels from the time-sharing data process model to business process outsourcing (BPO) and then to knowledge process outsourcing (KPO). ). Recently, companies have adopted a business strategy of outsourcing entire business activities, such as technology operations, customer relationship, logistics, finance, document processing, etc. The history of outsourcing started in the United States, when it was struck with economic stagnation and rising inflation rates. Since, then the US companies started outsourcing their service related jobs to cheaper locations to regain their profitability.
Globalization of economies supplemented by technological advances has led to the evolution of the outsourcing industry in India. After the flourishing of information technology (IT) in the late 1990s and 2000s, outsourcing has spread to Indian States. US companies started outsourcing information technology activities to low cost locations in India. Some of the companies also started their offshore facilities in India. The internet business boom is the main drive for this success. Especially two Asians giants China and India are the leaders in providing outsourcing services to the American industries.
India has been known for its huge talent pool and has proved to be one of the most significant destinations for global companies to outsource their back office operations. Due country's additional edge in knowledge based services, India has emerged as a favourite destination for outsourcing of knowledge processes too. Over a period of time, the industry has touched everyone from market researchers to accountants to medical professionals. Now BPOs have also started high end consulting jobs.
Over a decade, the industry has grown to a great level and will continue to grow in all the locations. India is considered to be among the most preferred destinations in the world. Reasons for preference of India lay in its skilled human resources, best infrastructure and climatic conditions that are suited to the clients' business activities.
Outsourcing to India is cheaper than outsourcing to other locations in the world and this is the main reason for companies outsourcing their business activities to India. Today outsourcing industry is moving towards a high level of specialization with great competition from low end process to high end process jobs. It has created worldwide opportunities in terms of enhanced revenues, product innovation and economic growth. Maximizing the value of outsourcing efforts will require deep economic and organization-specific business analysis so as to capture a more promised value without putting the rest of the business at risk.