Offshore outsourcing is the practice of hiring an external organization to perform some business functions in a country other than the one where the product or service will be sold or consumed. It can be contrasted with offshoring, in which the functions are performed in a foreign country by a foreign subsidiary. Open outsourcing makes open source technology more accessible to businesses and individuals by employing an inexpensive international labor force of programmers, often on a contractual piecework basis. Small businesses may not be technical enough to efficiently utilize open source resources in-house or large enough to hire a full time technician. Larger businesses with IT staff may lack technicians with specific skills or knowledge. Open outsourcing also reduces some of the risks associated with outsourcing by making the resulting code publicly available through open source licensing. Offshore outsourcing has provided many businesses with the opportunity to harvest the benefits of lower labor costs in developing countries with few workers rights laws and to exploit the value of artificially manipulated foreign currencies, where the exchange rate is intentionally undervalued. Through outsourcing, companies today have the ability to develop competitive strategies that will leverage their financial positions in the ever competitive global marketplace. Outsourcing is also successful in increasing product quality and/or substantially lowering firm and consumer costs (e.g., increases the quality to cost ratio). Because outsourcing allows for lower costs, even if quality reduces slightly or not at all, productivity increases, which benefits the economy in aggregate.
Outsourcing
