For proper context, let’s start with some basic definition of outsourcing.
Outsourcing refers to hiring an individual or a company to perform certain duties or tasks for another person or company at cheaper rates. It may also pertain to the practice of moving jobs offshore as a way for companies to cut down labor costs, which is why others refer to outsourcing using the term “offshoring.”
It’s worth knowing, however, that outsourcing has a long history to it, which goes as far back as the Industrial Revolution in the 18th century.
At the time, business owners began using outsourcing services for some of their company operations within the same city until manufacturing companies discovered sometime in the 20th century that they could outsource the production of their goods in factories overseas.
Companies realized they could lower costs on manufacturing, labor, and shipping this way, so outsourcing became a widely used business solution for this industry.
From then on, more and more companies from other industries followed suit, with computer companies being the first ones to outsource their payroll functions including billing and accounting to other countries.
Today, outsourcing is no longer limited to manufacturing and IT industries, as it is employed in just about any industry where the development, maintenance, and support of any product, service, or system can be entrusted to a third party that can deliver outsourcing services.
This is so companies recognize that outsourcing provides more than just savings on overhead and labor expenses. Improved efficiency, higher levels of productivity, increased competitiveness, shortened production time, and better focus on core functions within the business give company owners good reasons to use outsourcing services.
Check our ultimate list of outsourcing statistics to help you stay on top of current trends that could add impact and value to your business.