Outsourcing is a contractual arrangement in business in which one organization or company would be providing services to another organization. These services could have also been provided by an in-house arrangement in the company. Today outsourcing is a main strategy followed by several information technology companies as this is suitable for this kind of field. Several organizations are utilizing outsourcing as a strategy to manage their business. In several organizations management processes such as planning, HR solutions, planning, business, and analysis are also outsourced.
The duration and extent to which the workflow has been outsourced may vary from one organization to another (Sourcing Mag, 2008 & Tech Target, 2008). Today almost every organization would be engaging in outsourcing in some form or the other as they feel that it would improve their organizational strategy. Every company is trying to establish itself across the globe. They are also trying to arrange their resources in such a way that maximal profits are enabled.
Through outsourcing, companies are beginning to enter into the less developed nations and in this manner establish a global strategy. It is helping them to gain a competitive edge and gain an important part of the shareholder value. The other benefits of outsourcing include greater efficiency without investing much in resources, improve the quality of services, access expertise from the other parts of the world, increased revenues, use the IT advancements to enable business processes, etc (Cold Fusion Outsource, 2008).
One of the companies that have outsourced several processes of the organization is IBM. Several of the HR processes, IT systems and applications have been outsourced on a long-term basis by IBM. They have been able to attain a more effective strategy and also improve on quality. The financial health and the performance of the organization have improved significantly. The value for customers of IBM has also improved. IBM now has one of the largest global infrastructures. The tools, processes and intellectual resources of the company are one of the best in the world today (IBM, 2008).