This is an old revision of this page, as edited by 209.179.245.133 (talk) at 19:45, 28 May 2003 (Outsourcing requires delegating management responsibility). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.
Revision as of 19:45, 28 May 2003 by 209.179.245.133 (talk) (Outsourcing requires delegating management responsibility)(diff) ← Previous revision | Latest revision (diff) | Newer revision → (diff)Outsourcing became a popular buzzword in the 1990's, but few understand or agree on its meaning. The concept started with Ross Perot when he founded Electronic Data Systems in the 1950's. EDS would tell a prospective client, "You are familiar with designing, manufacturing and selling , but we're familiar with managing information technology. We can sell you the information technology you need and you pay us monthly for the service with a minimum commitment of two to ten years." Outsourcing as generally defined by those organizations that deliver such services, requires turning over management responsibility for running a segment of business. In theory, this business segment is not mission-critical, but practice dictates otherwise. Outsourcing business is characterized by expertise not inherent to the core of the client organization. Related term: Out-tasking: Turning over a narrowly-defined segment of business to another business, typically on an annual contract, or less. Usually involves continued direct or indirect management and decision-making by the client of the out-tasking business. Buying products from another entity is not outsourcing or out-tasking, but merely a vendor relationship. Buying services from a provider is not necessarily outsourcing or out-tasking.