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Explain processes may be outsourced to a captive unit or third party ??

Dear student,

The processes may be outsourced to a captive unit or a third party is one of important feature of Outsourcing. In case of big companies who have wide area of operations and deal in wide variety of products, they usually outsource their processes like recruitment, training, payroll management, etc to a third party or captive unit who is specialised in providing that type of services only. The service providers who are specialised in one type of services are called horizontal and those who specialise in two or more services are called verticals in outsourcing terminology. Outsourcing has became an emerging mode of business.

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Many activities have to be performed for the successful conduct of business like
productions, buying, selling, advertising etc. When the scale of business is small,
the businessman used to perform these activities easily. However, with the en-
largement of scale of business, this job has become tedious. Therefore, in order
to overcome the difficulties connected with the performance of many activities
and to get the benefit of specialisation, these services are now obtained from
outside the organisation. This is called outsourcing of services or BPO.
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Outsourcing can be done by giving contract to the third party so that the firm can focuse on its goals or objectives.
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