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Latest news on Outsourcing Companies

Citigroup is paying about $126 million to take full control of Indian IT services company e-Serve International.
The banking giant had owned about 44 percent of shares in the Indian company through its Citibank Overseas Investment unit. It is now increasing its stake to 100 percent, Mumbai-based e-searve on Monday informed the Bombay Stock Exchange, where it is listed.
The Indian company provides call center, transaction processing and data management services and has clients in 25 countries, including the United States, the United Kingdom and Australia. It has a staff of about 4,500.
The acquisition follows a similar move by IBM last week in the outsourcing sector. Big Blue agreed to take over privately held Daksh, India's third largest back-office-services company, in a deal estimated to be worth between $150 million and $200 million. Daksh, which has 6,000 employees, offers call center services to 13 clients including Internet retailer Amazon.com.
Numerous U.S.-based corporations are turning to Indian companies to handle a variety of business activities such as help desks, customer service and claims processing, either through their own subsidiaries or third-party operations. They're doing so to cut costs, but have drawn fire from politicians and trade unions because of job losses in the United States. The Information Technology Association of America trade group, however, has argued that so-called offshoring might actually help the U.S. economy.

Do you know?

It could be that the research and development of your daily dose of medication was outsouced to Indian chemists who were originally schooled in the US. Your insurance company which covered the cost of your medication also outsources-shifting the processing of your claim forms to a Pakistani trascription mill. And your neighborhood medical clinic, oursources the adminitration of your confidential medical records to Russia.

impact of Outsourcing

The most direct consequence of outsourcing is the 2.3 million job seen by the U.S. economy over the past three years. Tody, even the white collar jobs are moving away. In India alone, there was a 60% rise in outsoucing in 2003 in IT sector. The Information Technology Association of America, which represents 500 companies, reported in study in 2004 that oursourcing has eliminated 104,000 U.S. tech jobs.

IT outsourcing.

Information technology outsourcing is said to have originated with Kodak-IBM outsourcing of 1989. However, software development, data processing activities and support and maintenance were outsourced during 1970s. Cheap labor is one of the main factor to lure companies for outsourcing as the salaries of the IT workers elsewhere is much more less than in the United States.
The offshore outsourcing of information technology has attracted many companies in the United States since the last decade. In this complex business world, most companies are concerned with operation costs, and are ready to do whatsoever to decrease the cost of production or services. Most companies and researchers believe that outsourcing IT would help them to reduce costs in their operation system. It might be true in the short run, but in the long run, offshore outsourcing of IT will have a negative impact in the American industry. IT mostly consists highly skilled staffs and have to offer higher salaries. Because of the technological complexity and higher salaries, many organizations outsource IT services elsewhere, as it can bring higher return on investment. The company may maximize their profit due to the cheap labor overseas in compare to the higher salaries for the IT staffs in the U.S.

what is outsourcing

Outsourcing, generally means sending a workload to another company that is considered as capable of performing the task as demanded. Outsourcing can be between two companies within the boundary of the nation and out of the boundary as well. To be more precise while outsourcing to another country, offshore outsourcing is often used as the experts stated, “Offshoring is a term often used in the United States to specifically refer to outsourcing to another country”

Few information on Outsourcing

Outsourcing has increased briskly since 2001. As of last year, nine large U.S. airlines were outsourcing 67% of their heavy airframe maintenance, up from 34% in 2003
Source:(n.d.). Maintenance of jets still under fire. USA Today, Retrieved Thursday, April 12, 2007 from the Academic Search Premier database.