Part - I

A little more than a decade ago, Eastman Kodak Company and Equitax shook the corporate world by announcing a $250 million and $700 million, 10-year deals to outsource its functions. Cutting costs and allowing management to focus its attention on core activities were the primary objectives. Since then the number of outsourcing deals - and their value - has ballooned. Ever since, outsourcing is rapidly evolving beyond the simple reengineering of support processes. Business-process outsourcing, the hottest growth area in the outsourcing space is no longer relegated exclusively to IT or payroll checks, BPO includes a wide spectrum of back-office and customer-facing functions, such as accounts receivable, data processing, customer analytics, tax processing, and legal and equities research.

What is the rationale behind this outsourcing phenomenon?

For a number of CEOs, outsourcing partnerships are being used to achieve rapid, sustainable improvement in enterprise-level performance, but to put in simple terms- To go one up on competition. It is this competition that forces the management to spend hours and hours in devising strategies to attain sustainable growth.

In a survey conducted by Gartner to find out the reason for the outsourcing phenomenon, two major factors were identified namely core competency and cost. Out of the total respondents, seventy two percent attributed these two factors to be the ultimate driver for outsourcing.

                                                                                             Source: GARTNER

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* Contributed by: -
P. Bilesh,
Class of 2005,
BIM, Trichy.