Based on the book, outsourcing is the process of contracting with an external firm to provide products or services that would otherwise be completed internally.
Because of the development of technology making long distance control easier, firm started to contract out other business process such as call center, accounting, processing, data analyst and customer service to other firm in their home country and abroad.
The reason for outsourcing to third parties was to reduce cost as well as improving quality. Moreover company can allocate their resources for greater focus on core competencies.
Usually there is technology transfer and training between the parent firm and service provider. International outsourcing leads to posting of international assignees, ongoing business travel, and continual training to negotiate and oversee the relationships with the vendors.
The success of outsourcing is depend on these factor: executive level support in the client organization for the outsourcing mission; clear and frequent communication to employee; and the client ability to manage its service provider. On the other hand the outsourcing professionals need a combination of skills on negotiation, communication, adaptable in cross cultural setting, project management, human resource management and most importantly the ability to develop and understand the terms and conditions of the contracts and agreements.