question_answer 7)

How does outsourcing represent a new mode of business?

Answer:

Outsourcing represents a new mode of business as it is a departure from the traditional thinking of self sufficiency in business. It refers to a long-term contracting out of business activities to captive or third party specialists with a view to benefitting from their experience, expertise, efficiency and even investment. Generally the non-core business activities are outsourced but of late even some of the core activities have started being outsourced. Outsourcing comprises four key segments: contract manufacturing, contract research, contract sales and informatics. Global competitive pressures for higher quality products at lower costs, demanding customers and emerging technologies have induced a re-look at business processes and hence resulted in outsourcing as a new mode of business which is now being resorted to not out of compulsion but out of choice.