The term “Outsourcing” means delegating or passing on responsibility to a third party in pursuance with an agreement. The decision to outsource is a strategic one as it involves weighing the probable cost savings against the consequent loss in control over the product or service .Outsourcing involves a contractual agreement that defines how the client and the vendor will work together. The growth of outsourcing is partly due to the changes in business philosophy that have occurred over a period of time. Earlier companies aimed to acquire other companies and diversify their business as companies found it difficult to manage a large group of unrelated business they starting focusing their attention “core competence areas”.

Considering their unique experience and expertise the companies took efforts to identity the core competence areas that would help them gain a competitive edge over others in the market as the client companies usually outsource to a vendor that specializes in a given function and performs that function more efficiently than the company could do thereby saving on the cost. Companies also outsource to reduce the work burden of its employees and also to relieve them of tedious tasks thereby enabling them to develop their core competencies. Companies outsource information technology functions in order to gain access to new technology and outside expertise.

Outsourcing requires a good understanding of the vendor organization’s capabilities and their future plans. Outsourcing can be total outsourcing or selective outsourcing. Total outsourcing occurs when the client dismantles the entire departments or divisions and transfers the complete responsibility to an outside vendor. Selective outsourcing occurs when the client identifies specific time consuming activities which can be handled more effectively by an specialist (vendor) and outsourcers it.

The various factors that are to be considered while choosing a vendor are firstly whether the vendor has experience in providing service that the client wants to outsource. Secondly it is essential to find out whether the vendor has been able to provide quality services to their clients. Thirdly the client analyses on the details like the technology, software and the infrastructure of the vendor. Fourthly it is essential to check if the vendor has skilled personnel necessary to ensure successful completion of the outsourced project.

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Chennai has recorded a steady year-on-year growth as the outsourcing Companies are also scaling up and expanding their operations. The most important factor is that the Chennai is a much more cost-efficient city than any other metropolitan cities; moreover, it produces an equally good talent pool.

The speed at which the ITES-BPO sector is maturing in Chennai, India is really amazing and also BPO (Business Process Outsourcing) sector remains largely unaffected by the global financial crisis in the country. Chennai offers a magnificent, good infrastructure and also an enabling business environment to support IT-BPO firms to set up base there. Affordable cost of living, great physical and supporting infrastructure, availability of abundant talent, good governmental support, etc make Chennai the ideal choice for BPO Services. Adjacent to this, workforce and closeness to the airport are some other vital factors that are considered by most of the clients who tends to outsource their BPO projects.

“Chennai is a tier-1 BPO location and has been growing rapidly to address the needs for outsourced services. Historically, Chennai’s cost, skill, and work ethic balance has attracted high-end services, and, so far, it has scaled with the rapid growth in the BPO/ITeS sector in the past three years.”

Most of the companies looking for outsourcing their projects for BPO feel that when compared to other destinations in the south, Chennai offers better infrastructure. The key growth factors for Chennai have been its,

* Ability to provide the needs of the new economy in terms of factors such as critical mass of human resources with required skill-sets
* Competitive business environment to grow.
* Operating cost advantages, scalability, and low cost, quality real estate, telecom connectivity etc
* Quality of urban infrastructure, city governance and intelligibility
* Skilled professionals to deliver successful and quality output.

Due to the rise of Outsourcing companies which includes BPO, call centers, KPO, LPO etc. the Job opportunities have increased rapidly which proves that the skills and intelligence will never go in vain.