Outsourcing 101

The definition of outsourcing is "the act of obtaining services from an external firm." At AccountingDepartment.com, we believe that outsourced providers should be held to a standard of excellence that exceeds what businesses would expect from in-house delivery of those same services. AccountingDepartment.com is dedicated to meeting and surpassing that standard.

Business Process Outsourcing
In the corporate environment, the term “outsourcing” often refers to a particular type of outsourcing, business process outsourcing (BPO). BPO occurs when an organization turns over the management of a particular business process (such as accounting or payroll) to a third party that specializes in that process. The underlying theory is that the BPO firm can complete the process more efficiently, leaving the original firm free to concentrate on its core competency.

Roots of Outsourcing
The concept of outsourcing was first made popular by Ross Perot when he founded Electronic Data Systems (EDS) in 1962. EDS would say to a potential client, "You are good at designing and manufacturing widgets, but we are skilled with managing information technology. We will sell you the IT services that you require, and you can pay us periodically.” Today, EDS is a multi-billion dollar company with over 70,000 employees and is only one of many global BPO firms.

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