Outsourcing is equivalent to subcontracting.
Outsourcing is an English term that is widely used in the Spanish language, but which is not part of the Royal Spanish Academy (RAE) dictionary . Its equivalent term is subcontracting , the contract that one company makes with another so that the latter can carry out certain tasks that were originally in the hands of the former.
Outsourcing, in other words, consists of mobilizing resources to an external company through a contract . In this way, the subcontracted company carries out activities on behalf of the former. For example: a firm that offers Internet access services can subcontract another company to carry out the installations. The main company has the necessary network infrastructure and the staff to sell the service; the second, on the other hand, limits itself to going to the user's home to carry out the relevant installation. It should be noted that for the end customer there is no difference between the contracting company and the subcontracted company.
Offshore outsourcing
Offshore outsourcing refers to the transfer of resources to other countries, either with the participation of foreign companies or with the establishment of a headquarters in the foreign nation.
Examples of this type of outsourcing are often found in the IT sector, when American or European companies outsource certain services (such as web design or programming) to Latin American or Asian companies. The exchange rate makes outsourced companies cheaper for the contracting company, which allows it to save costs (contracting abroad is a more profitable option than doing so in its own country).
Outsourcing is common in the software industry.
Criticisms and disadvantages
Criticism of outsourcing refers to the precarious working conditions of subcontractors and the destruction of quality jobs in the national economy of the contracting company. Although it is never correct to generalize, these and other negative phenomena often occur when a company decides to delegate part of its responsibilities to another.
One of the possible disadvantages of this business practice is that the quality of the final product is put at risk due to the lack of communication between the different offices ; in addition, there are potential misunderstandings that often occur between people of different nationalities. On the other hand, the different work methodologies can affect the results, either by causing delays or by directly impacting the product .
Outsourcing problems
These problems become evident, for example, when a software development company hires another company abroad to review and correct its programs. First of all, it is important to note that there are infinite ways to structure source code, just as each person uses the languages they speak according to their needs and tastes, using or not using filler words, altering the pronunciation of certain sounds, etc.
Within the same country or city, a group of fifty people working on a computer development project generates a product with great cultural richness, even though at first glance the code appears indivisible; the presence or absence of annotations (called "comments"), the nomenclature of the variables (which should follow the company's standards, but is not always the case) and the efficiency of each part of the program are some of the points that vary from employee to employee.
When this code travels thousands of miles and falls into the hands of other people, with another culture , who speak another language and, perhaps, do not understand the original comments, it is expected that the result of their work will not be exactly what the main company expected, unless constant monitoring is carried out and support is offered at all times .