History of Offshore Outsourcing

Outsourcing is not a new concept, as many of us believe. Thousands of years a go man realized that importance of outsourcing. The realized that it would be impossible for him to fulfill all his needs by himself and he will have to rely on someone else. However, history of offshore outsourcing is new concept in which a company operates in more than one country for its operations.
Just before the industrial revolution, companies used to retain all the activities by themselves. They never relied for the matters of sales, storage and transportation, legal affairs, and taxes on others. Just after that many companies started outsourcing such activities like accounting, insurance, engineering, legal needs, etc to specialized firms. These firms were within the country and not offshore. Outsourcing was very poor at that moment but companies started making money with it. People never thought about offshore outsourcing till that point of time.

After Second World War, every thing changed. Many new countries appeared in the map of world and many existing were demolished. People learned new ways of business. Technology was improved and faster ways of communication and transportation were invented. Development of atomic weapons encouraged countries to resolve their differences to avoid Third World War. It was realized that there will be no life if incidence like world war recurred. All these factors gave birth to offshore outsourcing. History of offshore outsourcing begins from midst of 21st century.

Countries realized at that time that they can produce and save much more by working in appropriate locations. One company opened its factories in India due to low labor cost, revenue office in US and claim office in Malaysia. Outsourcing was welcomed by the developing economies because it increased employment and income levels of the workers.

At the end of 21st century, due to IT revolution concept of offshore outsourcing as become fairly popular. 10 years a go software companies started offshore outsourcing to reduce their cost. It was the time when world realized how much cost can be reduced through offshore outsourcing. Now after ten years it has become a “do or die” situation and offshore outsourcing is not only a cost saving method. It has become an essential revenue and growth strategy for almost every existing corporation.

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