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global phenomenon.

Features of outsourcing

i. Outsourcing involves contracting out:

Literally, outsourcing means to source from outside what you have
hitherto been doing in-house.

For example, most companies have so far appointed their own

sanitation staff for maintaining neatness, cleanliness and overall
housekeeping of their premises. That is, sanitation and housekeeping
functions were being performed in- house.

ii. Generally non-core business activities are outsourced: Sanitation and
housekeeping functions are non-core for most organizations. Of course,
for municipalities and sanitations services providers, these
activities comprise the core of their business activity.

Housekeeping is a core activity for a hotel. In other words, depending
upon what business a company is in, there will be some activities that

are central and critical to its basic business purpose.

iii. Processes may be outsourced to captive unit or a third party. Think of
a large multinational corporation that deals in diverse products and
markets them to a large number of countries.

A number of processes such as recruitment, selection, training, record
and payroll (Human Resources), management of accounts receivable and
accounts payable (accounting and finance), customer support/grievance

handling /troubleshooting (marketing) are common to all its
subsidiaries operating in different countries.