Business changes come as waves gathering shape, gaining energy and momentum and then crash across the organizations that find themselves in their path. Those companies that anticipate and react quickly to these waves of change can often rise with the tide; those that don’t, are often crushed by the impact. Technology, reengineering, the Internet, globalization etc. are some of the waves reshaping business today; which not only resulted in vast market but also created enormous competition. Yet, companies are not growing exponentially.

• Increased competition from fellow and local companies
• Increased need of skilled resources across continents in a tight labor market
• Increased maintenance costs on non-core business practices.

Business Process Outsourcing (BPO) - a process of transferring or delegating the operation and day-to-day management of a business process to an external service provider promises to solve the problems with most of the non-core business practices adopted by a company.
Outsourcing is now viewed as a business tool employed to achieve better return on investment by moving resources and capital from non-value adding (non-core) activities to areas which are considered core and strategic to the business. The most commonly accepted reason for the sudden growth of outsourcing is that many organizations sought to rapidly reduce costs, primarily staff. A less acknowledged reason is that many organizations have become so frustrated with the attitude and poor response of their internal groups that they are turning to external IT service providers with expectation of improved provision of services. These organizations are using specialized service providers to take on activities they once performed for themselves.

A recent survey* listed the following issues as a reason for utilizing IT services providers for outsourcing and resourcing:

• Software application development
• Augment staff during peak demand periods
• Well defined, short term projects
• Manage large complex projects
• Deploy new technologies
• Upgrade software & operating systems
• Perform health checks
• Maintain multiple platforms
  
  In addition to these, Strategic reasons to outsource included:
  
• To sharpen institutional focus
• Develop better capabilities
• Realize reengineering benefits
• Concentrate on core business
• Share risk and reallocate resources
  
  And finally, Tactical reasons to outsource included:
  
• In house resources were difficult to manage
• Resources were not available e.g. for legacy systems
• To reduce and control operating costs