Outsourcing: A Little Timeline

Many a philosopher have said that the key to unlocking the future and understanding the present is to learn from the past. And like other ideas born from different fields, outsourcing has had quite a history that we can pinpoint on the industrial aftermath of the Second World War: expansion of global trade. The government and economy of the United States were set on increasing imports to Asia and Europe to help them recover from their war-devastated economies.

1950s and 1960s.  Diversification was the word on businessmen's lips, which meant they sought to expand their corporate bases by taking advantage of economies of scale. By broadening their corporate reach, companies intended to safeguard their profits, even though that meant organizing multiple layers for management. 

1970s and 1980s. Companies who wanted to join the global competition during these years were crippled by inflated management structures, which proved to be quite inefficient. To address growing concerns on flexibility and creativity, several macro companies focused on their core business, determined critical processes, and ultimately, decided which of them could be outsourced. 

Competing globally in the 1970s and 1980s then meant contracting more Asian manufacturers to supply demands in apparel and garments, which was previously the job of factories in the United States.Overseas manufacturers became more technologically-sophisticated with time, and American companies started to outsource the production of electronics and cars as well. 

1990s. The concept of outsourcing as a convenient measure for cost-rationalization spread, and other companies soon joined the bandwagon to keep up with the competition. These companies outsourced tasks important for operation, but not necessary fundamental to the core business, to emerging service companies to perform services on accounting, human resources, data processing, and security.

Today, business process outsourcing puts more focus on client-vendor relationship to achieve business objectives and goals (How To Choose The Right Outsourcing Vendor). Outsourcing as a corporate endeavor is based more on who can perform assigned tasks more efficiently, than on whether the function is core or commodity.

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