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The dot-com bust of the late nineties had an impact on a lot of businesses. Its major impact was felt in America and Europe. Many companies went out of business. There was a sudden dearth of capital. Price and wage levels went down and venture capitalists became reluctant to lend new capital. Business consultants and managers started thinking of ways to get out of this problem. And a term called Business Process Outsourcing (BPO) came to limelight. Outsourcing means shifting non-core business processes or operations to another place where the cost of doing the same thing at the same quality level is much less. It simply means doing the same work at a different place where cost of raw-material and labor is less. Business operations usually outsourced include billing, preparing tax statements, call- centre, data management, software applications and a host of other activities.
There is some resentment among American and European citizens whose job is getting outsourced. But in a globalized world, one is expected to constantly upgrade his skills to save his/her job. Talking about globalization, outsourcing is considered as one of the forces of globalization. It has created a level playing field for businesses and organizations globally by bringing down the borders. Today, due to globalization and outsourcing, it is possible for much more people, from much more corners of the world to collaborate and exchange goods and services in a much better way than it was ever possible in the history of the world.
Countries that are unable to take advantage of outsourcing will lose in the long-term. Since cost of labor in developing countries is much less than their Western counterparts, they have become the usual outsourcing destinations. India and China are preferred for outsourcing because, apart from cheap resources, there is a huge talent pool or skilled manpower available there. India has benefited a lot from outsourcing. Many MNCs have set up shop in India. BPO has opened new job opportunities in India. Today, Indian corporate houses make billions from outsourcing. In software outsourcing, companies like Infosys, TCL, Wipro, Satyam and HCL are considered globally competitive. So, for India, dot-com bust was a blessing in disguise.