Outsourcing

Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Outsourcing is a business decision that is often made to lower costs or focus on core competences. A related term, offshoring, means transferring work to another country, typically overseas. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. Outsourcing became a popular buzzword in business and management in the 1990s. EDS was the first company to establish the outsourcing business.

Overview

Outsourcing is defined as the management and/or day-to-day execution of an entire business function by a third party service provider.

Outsourcing and/or out-tasking involve transferring a significant amount of management control to the supplier. Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust.

Organizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. In theory, this business segment should not be mission-critical, but practice often dictates otherwise. Many companies look to employ expert organizations in the areas targeted for outsourcing. Business segments typically outsourced include Information Technology, Human Resources, Facilities and Real Estate Management and Accounting. Many companies also outsource customer support and call center functions, manufacturing and engineering. Outsourcing business is characterized by expertise not inherent to the core of the client organization.

The overhead costs of customer service are typically less where outsourcing has been used, leading to many companies, from utilities to manufacturers, closing their in-house customer relations departments and outsourcing their customer service to third party call centers. The logical extension of these decisions was of outsourcing labor overseas to countries with lower labor costs, this trend is often referred to as offshoring of customer service.

Due to this demand call centers have sprung up in Canada, China, Eastern Europe, India, Israel, Ireland, Pakistan, Philippines and even the Caribbean. Many companies, most notably Dell and AT&T Wireless, have gained significant negative publicity for their decisions to use non-US labor for customer service and technical support; one of the most prominent complaints being the expectation that the replacement staff will have more trouble communicating with customers.

A related term is out-tasking: turning over a narrowly-defined segment of business to another business, typically on an annual contract, or sometimes a shorter one. This usually involves continued direct or indirect management and decision-making by the client of the out-tasking business.

The term "outsourcing" became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own. In some cases these companies hired technical writers to simplify the usage instructions of their products, index the key points of information and contracted with temporary employment agencies to find, train and hire generally low-skilled workers to answer their telephone technical support and customer service calls. These agents generally worked in call centers where the information needed to assist the calling customer was indexed in a computer system. The agents were often not able to tell the customer they did not actually directly work for the original manufacturer. In some cases, the agents are not allowed to even give out their real name.

Outsourcing, Offshoring, and Offshore Outsourcing

Note that “outsourcing”, “offshore outsourcing” and “offshoring” are used interchangeably in public discourse despite important technical differences. To be consistent, “outsourcing”, in corporate context, represents an organizational practice that involves the transfer of an organizational function to a third party. When this third party is located in another country the term “offshore outsourcing” makes more sense. “Offshoring”, in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. In short, “outsourcing” means sharing organizational control with another organization, or a process of establishing network relations within an organizational field. "Offshoring”, on the other hand, represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control.

Arguments for Outsourcing

A recent poll of economists by the Wall Street Journal found that only 16 % of them saw outsourcing as having a significant impact on the overall job picture. [1]

One criticism of outsourcing is that product quality suffers. But the outsourcing firm has freedom to move a firm department or division back home if its profits are suffering as a result of poor quality. In fact, many American companies like Dell have moved customer service divisions back to America as a result of poor quality [2]. The decision to outsource is like any other business investment decision in that there is risk. Critics of outsourcing often talk about outsourcing failures without mentioning instances of outsourcing success. The decision to outsource is like the decision to expand a business overseas, to incorporate computer technology, or to hire new workers. If the company does it correctly, it benefits from higher profits. Proponents of outsourcing believe that arguing that outsourcing leads to lower product quality is pointless because if it were true, consumer demand will force firms to shift back to producing the good or service in-firm rather than out-firm. That many large businesses outsource and continue to outsource suggests that in many cases outsourcing is successful in that it increases product quality, lowers costs substantially, or both.

Some economists have argued that outsourcing is a form of technological innovation analogous to machines on a car assembly line. American Motor Company Ford relied heavily on workers in the past to assemble car parts. Today these workers are replaced by machines because they are cheaper in the long run, produce better quality products, or a combination of both (the firm is trying to increase its quality to cost ratio, quality being defined by the consumer and inferred from revenue). Economists argue that machines on the car assembly line must have a higher quality to cost ratio than workers because, if they didn’t, there would be no incentive for the firm to replace workers with machines. Although workers’ jobs were lost from this replacement of workers with machines, the Ford Motor Company made more money by lowering costs (or increasing quality, thereby increasing revenue). Some argue that greater profits to the labor owners lead to higher consumption, which leads to further job creation, allowing those who lost jobs to gain jobs in other sectors of the economy. However, economists do concede that labor is not always perfectly mobile and that some workers may have difficulty getting new jobs. Some economists suggest that government training programs be provided.

A firm's motivation for replacing workers with machines is identical to the motivation for outsourcing, i.e. the firm is trying to maximize the quality of its product given cost (its productivity). Because outsourcing allows for lower costs, even if quality reduces slightly or not at all, productivity increases, which benefits the economy on aggregate.

Economist Thomas Sowell from the University of Chicago said “anything that increases economic efficiency--whether by outsourcing or a hundred other things--is likely to cost somebody's job. The automobile cost the jobs of people who took care of horses or made saddles, carriages, and horseshoes.” [1] Walter Williams, another economist, said “we could probably think of hundreds of jobs that either don't exist or exist in far fewer numbers than in the past--jobs such as elevator operator, TV repairman and coal deliveryman. ‘Creative destruction’ is a discovery process where we find ways to produce goods and services more cheaply. That in turn makes us all richer.” [2]

Professor Drezner reports that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. [3] Drezner also points out that large software companies such as Microsoft and Oracle have increased outsourcing and used the savings for investment and larger domestic payrolls. Nationally, 70,000 computer programmers lost their jobs between 1999 and 2003, but more than 115,000 computer software engineers found higher-paying jobs during that same period. [3]

Advocates of outsourcing also claim that outsourcing-related fraud is insignificant, averring that such malpractices can occur in any country. For example, 40 million credit card numbers were stolen in June 2005 at CardSystems Solutions in Tucson, Arizona. (See the full story.). In December 2005, nearly 50 people were indicted in connection with a scheme that bilked at least $200,000 from Katrina relief fund at Red Cross claim center in Bakersfield, Calif., which handled calls from storm victims.

Criticisms of Outsourcing

Because "outsourced" workers are not actually paid agents of the company, it has been argued that there is less incentive for the agent to show loyalty or work ethic in its representation of said company. It has been therefore argued that quality levels of customer service and technical support of outsourced tasks are lower than where they have remained 'in-house'.

The 2004 US presidential election race focused on outsourcing to some degree. This debate did not center on problems of declining quality of customer services but on the threat to US jobs and work. Criticism of outsourcing, from the perspective of US citizens, by-and-large, revolves around the costs associated with transferring control of the labor process to an external entity in another country. A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurts the economy and another 62% believe that the US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource. The poll of over 1,000 Americans was conducted in August 2004 (See Zogby International survey results online at zogby.com).

Outsourcing appears to threaten the livelihood of domestic workers and the American Dream. This is especially true for high-tech workers who were promised the “jobs of tomorrow”- a phrase Bill Clinton iterated in 1994 to justify his conservative position on NAFTA. Outsourcing appears to work contrary to the claim that “free trade” will create the “jobs of tomorrow” in America when high-tech or high paying white collar jobs are transferred to or created in foreign countries. Thus, outsourcing is criticized as it represents a new threat to labor, contributing to rampant worker insecurity, and reflective of the general process of globalization where the United States government fails to mediate business-labor relations in a way conducive to prevailing values that places the American middle class worker as a central priority.

Criticism of outsourcing from the public and media sometimes tend to concentrate on lackluster customer service and technical support being provided by either local workers who are not actually employees of the company, or by overseas workers attempting to communicate with Americans in broken or incomprehensible English. Defenders of outsourcing say if this were true, then companies would experience market forces compelling them to return service and support handling back from the outsourced company. However, service and support are often not considered by customers as part of their original purchases. Customers only experience outsourced service and support after they have spent their money since sales is generally done in-house by the original company. Dealing with lackluster outsourced service is a negative surprise after the money is already spent.

Policy solutions to outsourcing are also criticized. One solution often offered is retraining of domestic workers to new jobs. However, some of these workers are already highly educated and already possess a bachelor's and master's degree. Retraining to their current level in another field may not be an option due to years of study and cost of education involved. There is also little incentive given that the jobs in their new field could also be outsourced as well. Proportions of workers trained for Science, Technology, Engineering, and Mathematics (STEM) fields fields in developing nations are viewed to outstrip traditional technology leaders such as the U.S. With these traditionally "safe" jobs perceived to be endangered, this raises questions regarding whether origin countries can maintain any comparative advantage given the losses in both low and high-value jobs.

There are also security issues concerning companies giving outside access to sensitive customer information. In April of 2005, a high-profile case involving the theft of $350,000 from four Citibank customers occurred when Indian call center workers in Pune, India, acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank. (See the full report.)

Outright fraud is also a concern. In 2005, Intel discovered and fired 250 Indian employees after they faked their expense reports. The firings followed from Intel's internal Business Practice Excellence programme of expenses claims. The report concluded that fraudulent practises such as "faking bills to claim your allowances like conveyance [and] drivers’ salaries" were some common malpractices in India. Intel would not put up with such fraud. NASSCOM, which is a forum of IT and ITeS companies, has attempted to address these fraud concerns in India by creating the National Skills Registry. That database contains personal and work-related information, enabling employers to verify a staff member's credentials and allowing police to track the background of workers.

Democratic U.S. presidential candidate John Kerry blasted firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their fair share of US taxes during his unsuccessful 2004 campaign, calling such firms "Benedict Arnold corporations," in reference to the infamous traitor Benedict Arnold.

It is argued a malicious implementation of the Higher Education Role Analysis (HERA) in the UK may force Higher Education administrative and support staff to prematurely retire or seek for new employment in other organisations, thus freeing of staff many departments which could then be effectively outsourced. Outsourcing departments like Accounts, Payroll and Procurement is now common practice, as seen in August 2005 at the University of Portsmouth.

Notes

  1. ^  This view is borne out by a recent study by Richard Freeman at the National Bureau of Economic Research in Washington. He found that in the year 2000, 17 % of university bachelor degrees in the U.S. were in science and engineering compared with a world average of 27 % and 52 % in China. Universities in the European Union granted 40 % more science and engineering doctorates than the United States, with that figure expected to reach nearly 100 % by about 2010 according to Freeman's paper.
  2. 1. ^  “Outsourcing” and “Saving Jobs” by Thomas Sowell
  3. 2. ^  Should we “Save Jobs”? by Walter Williams
  4. 3. ^  "Outsourcing is the Kool" (kOOL PEOPLE)

Literature

Mark Kobayashi-Hillary. 2004. (2nd ed 2005) Outsourcing to India. ISBN 354023943X.


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(2nd ed 2005) Outsourcing to India. ISBN 354023943X.
. 2004. 2000s. Mark Kobayashi-Hillary. 1990s. Outsourcing departments like Accounts, Payroll and Procurement is now common practice, as seen in August 2005 at the University of Portsmouth. 1905 to 1990s.

It is argued a malicious implementation of the Higher Education Role Analysis (HERA) in the UK may force Higher Education administrative and support staff to prematurely retire or seek for new employment in other organisations, thus freeing of staff many departments which could then be effectively outsourced. As of 1 September 2005:. presidential candidate John Kerry blasted firms that outsource jobs abroad or that incorporate overseas in tax havens to avoid paying their fair share of US taxes during his unsuccessful 2004 campaign, calling such firms "Benedict Arnold corporations," in reference to the infamous traitor Benedict Arnold. . Democratic U.S. The club's ground, Ali Sami Yen Stadyumu, reopened for the 2004-05 season, and a massive renovation project of one of its stands was completed in the 5th week of 2005-2006 season. That database contains personal and work-related information, enabling employers to verify a staff member's credentials and allowing police to track the background of workers. This lead to Galatasaray fans being banned from travelling to Leeds for the away leg, despite opposition from Turkish officials.

NASSCOM, which is a forum of IT and ITeS companies, has attempted to address these fraud concerns in India by creating the National Skills Registry. During the match, while a message of condolence was read out for the victims, the home fans jeered. Intel would not put up with such fraud. The team is famous for its outstandingly enthusiastic home support, especially for its supporters' habit of displaying enormous banners throughout its ground, welcoming visiting teams "to Hell!" On the eve of Galatasaray’s Uefa Cup semi-final first leg match against Leeds United, two Leeds fans, Chris Loftus and Kevin Speight, were murdered by Galatasaray fans. The report concluded that fraudulent practises such as "faking bills to claim your allowances like conveyance [and] drivers’ salaries" were some common malpractices in India. Galatasaray is the most internationally recognised Turkish club as a result of its European successes. The firings followed from Intel's internal Business Practice Excellence programme of expenses claims. In winning the UEFA Cup during the 1999/2000 season, beating Arsenal of England on penalties, Galatasaray became the first Turkish club ever to win a European trophy.

In 2005, Intel discovered and fired 250 Indian employees after they faked their expense reports. Galatasaray is one of only two teams to have won the UEFA Cup without being beaten in a single match, (the other being Ajax), and is also notable for being the first team to win the competition after having been knocked out of the Champions League. Outright fraud is also a concern. Founded in 1905 by Ali Sami Yen and his fellows from the prestigious Galatasaray High School, Galatasaray currently has 15 Turkish league championships, and also won the UEFA Cup and UEFA Super Cup in 2000. (See the full report.). Galatasaray Spor Kulübü (Galatasaray Sports Club, or Galatasaray SK) is a Turkish sports club based in İstanbul which is most famous for its football section. Citibank did not find out about the problem until the American customers noticed discrepancies with their accounts and notified the bank.
For Galatasaray High School, visit Galatasaray Lisesi.

In April of 2005, a high-profile case involving the theft of $350,000 from four Citibank customers occurred when Indian call center workers in Pune, India, acquired the passwords to customer accounts and transferred the money to their own accounts opened under fictitious names. Özhan Canaydın (2002-...). There are also security issues concerning companies giving outside access to sensitive customer information. Mehmet Cansun (2001-2002). With these traditionally "safe" jobs perceived to be endangered, this raises questions regarding whether origin countries can maintain any comparative advantage given the losses in both low and high-value jobs. H. Proportions of workers trained for Science, Technology, Engineering, and Mathematics (STEM) fields fields in developing nations are viewed to outstrip traditional technology leaders such as the U.S. Faruk Süren (1996-2001).

There is also little incentive given that the jobs in their new field could also be outsourced as well. Alp Yalman (1990-1992) (1992-1996). Retraining to their current level in another field may not be an option due to years of study and cost of education involved. Ali Tanrıyar (1986-1988) (1988-1990). However, some of these workers are already highly educated and already possess a bachelor's and master's degree. Dr. One solution often offered is retraining of domestic workers to new jobs. Ali Uras (1979-1984) (1984-1986).

Policy solutions to outsourcing are also criticized. Dr. Dealing with lackluster outsourced service is a negative surprise after the money is already spent. Prof. Customers only experience outsourced service and support after they have spent their money since sales is generally done in-house by the original company. Mustafa Pekin (1973-1975). However, service and support are often not considered by customers as part of their original purchases. Dr.

Defenders of outsourcing say if this were true, then companies would experience market forces compelling them to return service and support handling back from the outsourced company. Prof. Criticism of outsourcing from the public and media sometimes tend to concentrate on lackluster customer service and technical support being provided by either local workers who are not actually employees of the company, or by overseas workers attempting to communicate with Americans in broken or incomprehensible English. Selahattin Beyazıt (1969-1973) (1975-1979). Thus, outsourcing is criticized as it represents a new threat to labor, contributing to rampant worker insecurity, and reflective of the general process of globalization where the United States government fails to mediate business-labor relations in a way conducive to prevailing values that places the American middle class worker as a central priority. Sadik Giz (1957-1959). Outsourcing appears to work contrary to the claim that “free trade” will create the “jobs of tomorrow” in America when high-tech or high paying white collar jobs are transferred to or created in foreign countries. Refik Selimoğlu (1954-1956) (1960-1962).

This is especially true for high-tech workers who were promised the “jobs of tomorrow”- a phrase Bill Clinton iterated in 1994 to justify his conservative position on NAFTA. Ulvi Yenal (1953) (1962-1964). Outsourcing appears to threaten the livelihood of domestic workers and the American Dream. Suphi Batur (1946-1950) (1965-1968). The poll of over 1,000 Americans was conducted in August 2004 (See Zogby International survey results online at zogby.com). Muslihittin Peykoğlu (1944-1946). A Zogby International poll reports that 71% of American voters believe that “outsourcing jobs overseas” hurts the economy and another 62% believe that the US government should impose some legislative action against companies that transfer domestic jobs overseas, possibly in the form of increased taxes on companies that outsource. Osman Dardağan(1942-1943).

Criticism of outsourcing, from the perspective of US citizens, by-and-large, revolves around the costs associated with transferring control of the labor process to an external entity in another country. Tevfik Ali Çınar (1940-1942). This debate did not center on problems of declining quality of customer services but on the threat to US jobs and work. Adnan Akıska (1939). The 2004 US presidential election race focused on outsourcing to some degree. Nizan Nuri (1939). It has been therefore argued that quality levels of customer service and technical support of outsourced tasks are lower than where they have remained 'in-house'. Sedat Ziya Kantoğlu (1937-1939) (1944).

Because "outsourced" workers are not actually paid agents of the company, it has been argued that there is less incentive for the agent to show loyalty or work ethic in its representation of said company. Saim Gögen (1936-1937). In December 2005, nearly 50 people were indicted in connection with a scheme that bilked at least $200,000 from Katrina relief fund at Red Cross claim center in Bakersfield, Calif., which handled calls from storm victims. Fethi Isfendiyaroğlu (1933). (See the full story.). Ali Haydar Barsal (1932-1933) (1933-1934). For example, 40 million credit card numbers were stolen in June 2005 at CardSystems Solutions in Tucson, Arizona. Tahir Kevkep (1931-1932).

Advocates of outsourcing also claim that outsourcing-related fraud is insignificant, averring that such malpractices can occur in any country. Ahmet Kara (1930-1931) (1933). [3]. Abidin Daver (1929-1930). Nationally, 70,000 computer programmers lost their jobs between 1999 and 2003, but more than 115,000 computer software engineers found higher-paying jobs during that same period. Necmettin Sadak (1928-1929). [3] Drezner also points out that large software companies such as Microsoft and Oracle have increased outsourcing and used the savings for investment and larger domestic payrolls. Adnan Ibrahim Pirioğlu (1927).

Professor Drezner reports that for every dollar spent on outsourcing to India, the United States reaps between $1.12 and $1.14 in benefits. Ahmet Robenson (1926). That in turn makes us all richer.” [2]. Ali Haydar Şekip (1925). ‘Creative destruction’ is a discovery process where we find ways to produce goods and services more cheaply. Yusuf Ziya Öniş (1922-1924) (1950-1952). The automobile cost the jobs of people who took care of horses or made saddles, carriages, and horseshoes.” [1] Walter Williams, another economist, said “we could probably think of hundreds of jobs that either don't exist or exist in far fewer numbers than in the past--jobs such as elevator operator, TV repairman and coal deliveryman. Refik Cevdet Kalpakçıoğlu (1919-1922) (1934).

Economist Thomas Sowell from the University of Chicago said “anything that increases economic efficiency--whether by outsourcing or a hundred other things--is likely to cost somebody's job. Ali Sami Yen (1905-1918) (1925). Because outsourcing allows for lower costs, even if quality reduces slightly or not at all, productivity increases, which benefits the economy on aggregate. Eric Gerets (2005-...). the firm is trying to maximize the quality of its product given cost (its productivity). Gheorghe Hagi (2004-2005). A firm's motivation for replacing workers with machines is identical to the motivation for outsourcing, i.e. Mircea Lucescu (2000-2002).

Some economists suggest that government training programs be provided. Fatih Terim (1996-2000) (2002-2004). However, economists do concede that labor is not always perfectly mobile and that some workers may have difficulty getting new jobs. Graeme Souness (1995-1996). Some argue that greater profits to the labor owners lead to higher consumption, which leads to further job creation, allowing those who lost jobs to gain jobs in other sectors of the economy. Saftig (1994-1995). Although workers’ jobs were lost from this replacement of workers with machines, the Ford Motor Company made more money by lowering costs (or increasing quality, thereby increasing revenue). Rainer Hollmann-Karl Heinz Feldkamp (1993-1994).

Economists argue that machines on the car assembly line must have a higher quality to cost ratio than workers because, if they didn’t, there would be no incentive for the firm to replace workers with machines. Karl Heinz Feldkamp (1992-1993). Today these workers are replaced by machines because they are cheaper in the long run, produce better quality products, or a combination of both (the firm is trying to increase its quality to cost ratio, quality being defined by the consumer and inferred from revenue). Sigfried Held (1990-1991). American Motor Company Ford relied heavily on workers in the past to assemble car parts. Mustafa Denizli (1988-1990) (1991-1992). Some economists have argued that outsourcing is a form of technological innovation analogous to machines on a car assembly line. Jupp Derwall (1984-1988).

That many large businesses outsource and continue to outsource suggests that in many cases outsourcing is successful in that it increases product quality, lowers costs substantially, or both. Tomislav Ivic (1983-1984). Proponents of outsourcing believe that arguing that outsourcing leads to lower product quality is pointless because if it were true, consumer demand will force firms to shift back to producing the good or service in-firm rather than out-firm. Özkan Sümer (1982-1983). If the company does it correctly, it benefits from higher profits. Sergio Almaguer. The decision to outsource is like the decision to expand a business overseas, to incorporate computer technology, or to hire new workers. Rigobert Song.

Critics of outsourcing often talk about outsourcing failures without mentioning instances of outsourcing success. Mondragon. The decision to outsource is like any other business investment decision in that there is risk. Umit Karan. In fact, many American companies like Dell have moved customer service divisions back to America as a result of poor quality [2]. Elvir Baljic. But the outsourcing firm has freedom to move a firm department or division back home if its profits are suffering as a result of poor quality. Frank De Boer.

One criticism of outsourcing is that product quality suffers. Haim Revivo. [1]. Mario Jardel. A recent poll of economists by the Wall Street Journal found that only 16 % of them saw outsourcing as having a significant impact on the overall job picture. Flavio Conceição. "Offshoring”, on the other hand, represents a relocation of an organizational function to a foreign country, not necessarily a transformation of internal organizational control. Necati Ateş.

In short, “outsourcing” means sharing organizational control with another organization, or a process of establishing network relations within an organizational field. Hasan Şaş. “Offshoring”, in contrast, represents the transfer of an organizational function to another country, regardless of whether the work stays in the corporation or not. Brad Friedel. When this third party is located in another country the term “offshore outsourcing” makes more sense. Reinhard Stumpf. To be consistent, “outsourcing”, in corporate context, represents an organizational practice that involves the transfer of an organizational function to a third party. Falco Götz.

Note that “outsourcing”, “offshore outsourcing” and “offshoring” are used interchangeably in public discourse despite important technical differences. Oliveira Capone. In some cases, the agents are not allowed to even give out their real name. Kubilay Türkyilmaz. The agents were often not able to tell the customer they did not actually directly work for the original manufacturer. Adrian Ilie. These agents generally worked in call centers where the information needed to assist the calling customer was indexed in a computer system. Hamza Hamzaoğlu.

In some cases these companies hired technical writers to simplify the usage instructions of their products, index the key points of information and contracted with temporary employment agencies to find, train and hire generally low-skilled workers to answer their telephone technical support and customer service calls. Ümit Davala. The term "outsourcing" became more well known largely because of a growth in the number of high-tech companies in the early 1990s that were often not large enough to be able to easily maintain large customer service departments of their own. Hakan Ünsal. This usually involves continued direct or indirect management and decision-making by the client of the out-tasking business. Suat Kaya. A related term is out-tasking: turning over a narrowly-defined segment of business to another business, typically on an annual contract, or sometimes a shorter one. Arif Erdem.

Many companies, most notably Dell and AT&T Wireless, have gained significant negative publicity for their decisions to use non-US labor for customer service and technical support; one of the most prominent complaints being the expectation that the replacement staff will have more trouble communicating with customers. Okan Buruk. Due to this demand call centers have sprung up in Canada, China, Eastern Europe, India, Israel, Ireland, Pakistan, Philippines and even the Caribbean. Emre Belözoğlu. The logical extension of these decisions was of outsourcing labor overseas to countries with lower labor costs, this trend is often referred to as offshoring of customer service. Tugay Kerimoğlu. The overhead costs of customer service are typically less where outsourcing has been used, leading to many companies, from utilities to manufacturers, closing their in-house customer relations departments and outsourcing their customer service to third party call centers. Claudio Taffarel.

Outsourcing business is characterized by expertise not inherent to the core of the client organization. Gheorghe Popescu. Many companies also outsource customer support and call center functions, manufacturing and engineering. Gheorghe Hagi. Business segments typically outsourced include Information Technology, Human Resources, Facilities and Real Estate Management and Accounting. Hakan Şükür. Many companies look to employ expert organizations in the areas targeted for outsourcing. Bülent Korkmaz.

In theory, this business segment should not be mission-critical, but practice often dictates otherwise. Didier Six. Organizations that deliver such services feel that outsourcing requires the turning over of management responsibility for running a segment of business. Metin Yildiz. Outsourcing always involves a considerable degree of two-way information exchange, co-ordination, and trust. Zoran Simoviċ. Likewise, buying services from a provider is not necessarily outsourcing or out-tasking. Xhevad Prekazi.

Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Mustafa Denizli. Outsourcing and/or out-tasking involve transferring a significant amount of management control to the supplier. Fatih Terim. Outsourcing is defined as the management and/or day-to-day execution of an entire business function by a third party service provider. Uğur Tütüneker. . Tanju Çolak.

EDS was the first company to establish the outsourcing business. Turgay Şeren. Outsourcing became a popular buzzword in business and management in the 1990s. Metin Oktay. Offshoring is similar to outsourcing when companies hire overseas subcontractors, but differs when companies transfer work to the same company in another country. Quarter-final in 2000-2001 (eliminated by Real Madrid 3-2 in Istanbul and 0-3 in Spain). A related term, offshoring, means transferring work to another country, typically overseas. Semi-final in 1988-1989 (eliminated by FC Steaua Bucuresti 0-4 in Romania, 1-1 in Istanbul ).

Outsourcing is a business decision that is often made to lower costs or focus on core competences. UEFA Champions League:

    . Outsourcing (or contracting out) is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity (such as a subcontractor) that specializes in that operation. Real Madrid. ^  "Outsourcing is the Kool" (kOOL PEOPLE). European Super Cup (1): 2000, 2-1 vs. 3. Arsenal.

    ^  Should we “Save Jobs”? by Walter Williams. UEFA Cup (1): 2000, 4-1 on penalties after a 0-0 draw vs. 2. Turkish Cup (14): 1963, 1964, 1965, 1966, 1973, 1976, 1982, 1985, 1991, 1993, 1995, 1999, 2000, 2005. ^  “Outsourcing” and “Saving Jobs” by Thomas Sowell. Turkish league championships (15): 1962, 1963, 1969, 1971, 1972, 1973, 1987, 1988, 1993, 1994, 1997, 1998, 1999, 2000, 2002. 1.

    Universities in the European Union granted 40 % more science and engineering doctorates than the United States, with that figure expected to reach nearly 100 % by about 2010 according to Freeman's paper. were in science and engineering compared with a world average of 27 % and 52 % in China. He found that in the year 2000, 17 % of university bachelor degrees in the U.S. ^  This view is borne out by a recent study by Richard Freeman at the National Bureau of Economic Research in Washington.

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