History Outsourcing Part-1

For most of the 20th century, a successful firm was defined by its ability to own, manage and directly control all of its assets and processes. In the 1950s and 1960s, in order to protect profits, companies began to look for ways to broaden their base and take advantage of economies of scale. This resulted in the emergence of diversification as a popular strategy,,,,

As competition became more global in the 1970's and 1980's, organizations found that diversification had actually bloated their management structures...........

Consequently, they had lost their flexibility. To counter this undesirable development, many large companies began to consider outsourcing. Shifting focus to their core processes, they handed off non-critical (non-core) procedures, to be managed by third parties!!

It wasn't until the early 1990s, however, that outsourcing really caught on. Companies, now focusing on cost-saving measures to increase revenues, realized the value of handing-off functions necessary, but not directly related, to their core businesses. The trend toward using outsourcing as part of an effective business strategy continues to the present !!!

Traditionally, headcount and cost reductions were the primary drivers of outsourcing initiatives. Today, however, outsourcing is a more strategic decision, focusing on core competencies. Some common reasons for outsourcing in the 21st century include.

As competition became more global in the 1970's and 1980's, organizations found that diversification had actually bloated their management structures........... end of part -1

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