In their quest to achieve strategic focus, businesses worldwide are choosing to develop areas of core competence and outsource the other business process.With increasing globalization, enterprises worldwide are facing the challenge to find the niches where they can add the greatest economic value. As a result, enterprises have looked for ways to avoid making investments in non-core areas. As service providers witnessed this development, they began to create whole enterprises based on narrow business processes. The term Business Process Outsourcing (BPO) was coined in about 1995 and became popular in few years, accelerated by the explosion of Internet business. Business process outsourcing has become a preeminent topic in the business world. Currently, more companies are handing over critical, often mundane and non-core tasks to outsourcers, in order to focus more attention on their strategic functions.
The Harvard Business Review identified outsourcing as one of the most important management idea and practice of the last 75 years. It is the latest trend in today's business world. More than 90 percent of the US companies outsource one or more activities. According to international business research organization IDC, spending on outsourcing is likely to be $150 bn by 2003. In sectors, such as media and publishing outsourcing has been a long-established practice. It is normal for publishing houses to use external organizations for data sourcing, design and layout, printing, subscription and distribution services. While, organizations are using outsourcing in an aggressive mode, its principles have been around for a long -time. The Greeks and Romans hired foreign soldiers to fight their wars, and artisans to build their cities and palaces. Outsourcing is here to stay. It is already the foundation of the global, connected economy. It was once a strategic tool. Today, the Internet has made outsourcing the pervasive paradigm. You may choose to ignore it, but you do so at your own peril - because your competitors are not ignoring it.
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