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A Brief History of Outsourcing

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Outsourcing involves hiring independent contractors or entering into an agreement with another company to perform services on behalf of the hiring organization. Today outsourcing and offshoring are associated mostly with remote IT jobs, and offshore software development is considered to be among the best remote jobs. However, the history of outsourcing dates back to the time of the Industrial Revolution, which began in Europe in 1750. In this article, we will highlight the most important moments of this history, give some interesting facts regarding the evolution of outsourcing, and discuss how it affected the IT industry.

The History of Outsourcing: Key Moments

Here are the most remarkable moments in the history of outsourcing:

  • 1750 – 1900: The Industrial Revolution lead to the mass production of goods and caused the growth of markets and profits. Many companies experienced a shortage of local human resources, so they started contracting with third-party firms to delegate the accounting, legal, and insurance tasks.
  • 1920s-1980s: The two wars devastated and changed the world. At the same time, they resulted in technological progress because of an urgent need to rebuild the destroyed infrastructure. The technological progress required more workforce, and this caused the further development of outsourcing. For example, in 1921, outsourcing of salary calculations helped General Motors to get out of the crisis. The 1970s can be considered as a period when remote work was born. In 1972, the term “telecommuting” was first coined by Jack Nilles who was working remotely for
  • 1980s-1990s: In 1981, economist Ronald Coase invented the term “outsourcing”. The term consists of two words: “outside” and “resourcing”. The publishing industry was one of the first industries to actively outsource such services as composition, printing, and fulfillment. Besides, the evolution of computers initiated outsourcing in the IT industry, when IBM and EDS started lending their high-capacity hardware to other companies. In the 1990s, application service providers (ASPs) started renting software applications to other companies. This was close to modern software development outsourcing.
  • Modern outsourcing trends: Nowadays a wide range of companies in the textile, automotive, electronics, and IT industries establish offices or move their production capacity to other countries. For example, Apple outsources manufacturing to China, and software companies hire remote developer teams from other countries because of cost efficiency and access to the tech talent pool. Today, you can even build a distributed dedicated team which is significantly different from outsourcing but just hasn’t gained wide popularity yet.

Jobs Lost to Outsourcing Statistics and Other Facts

Unfortunately, the rise of outsourcing can impact the US economy. Specifically, it can increase the job loss rate. According to the jobs lost to outsourcing statistics report by George Faraday for Good Jobs Nation, more than 93,000 jobs were lost due to outsourcing as of 2017. In total, this number is higher than the average job loss rate of 87,576 between 2012 and 2016.

The results of the Global Outsourcing Survey by Deloitte show that IT still remains the most outsourced industry, as specified by 29% of survey respondents. According to the State of Remote Work 2018 Report by Buffer, most remote workers also belong to the IT and software development industry. It means that the remote tech jobs are on the rise now, thus disrupting the outsourcing trend.

Is Remote Work the Future?

Modern technologies simplify remote team communication and thus increase the number of remote software developer jobs, which are especially popular with young startups. Remote team collaboration has the following advantages both for the employers and employees:

  • Larger talent pool. There’s a limited number of local developers at certain locations. Outstaffing opens new horizons for companies because now they can choose from a wide range of skilled tech talents across the world.
  • Cost efficiency. The cost of living in offshore countries is lower than in the US or Western Europe. As a result, the cost of offshore software development is also relatively low but the quality of work is still high.
  • Increased team productivity. Remote team members do not spend time on commuting to work, thus being more efficient with their tasks.
  • Remote team management software. Today’s technology market offers a wide variety of project management tools such as JIRA, Trello, Asana, etc. that are tailored specially to remote team communication.

Working with remote teams can also be a real challenge both for the employers and distributed team members due to the following reasons:

  • Lack of knowledge on how to manage remote teams. It’s not easy to work with people whose faces you’ve never seen. You can read tons of instructions on how to manage a remote team and still not be prepared for unexpected issues such as the sudden disappearance of team members without any explanations.
  • Time zone differences. Being located in different time zones is common for any distributed team. This leads to asynchronous communication issues, making it necessary to choose optimal time slots for meetings. However, it is possible to fix those issues with special team communication tools that consider the time zone differences.
  • Team efficiency analysis. Lack of face-to-face communication makes it difficult to monitor the efficiency of remote teams. Again, specialized project management software for distributed teams can handle this problem.

The Bottom Line

The IT outsourcing trend began in the 1980s when IBM and EDS started renting their computers and acting as data centers for other companies. In the 1990s, IT companies started outsourcing not only hardware but also software, calling themselves application service providers (ASPs). The trend of remote work, which is close to outsourcing, has its roots in the 1970s when a NASA employee created the term “telecommuting”. Today outsourcing, offshoring, and remote work are extremely popular with software developers. Working remotely has both advantages and challenges, but the latter can be solved with remote management software. Anyway, it’s up to companies to choose if they need outsourcing.

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Airtel Plans Relief For Visually Impaired Teacher

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Airtel Nigeria has announced that in the next episode of “Airtel Touching Lives”, the companys TV series that spotlights its efforts to bring succour to underprivileged Nigerians, the focus will be on Timilehin Segun, a visually impaired teacher.
Segun, who Airtel describes as extraordinary, devotes his life to educating and inspiring the youths in his community, despite his own physical limitations.
The upcoming episode, which is the third in the seventh season, was aired on Sunday, 9th July 2023, and took viewers through Seguns journey from a blind pupil to the neighbourhood mentor who now runs a popular programme, “Reliable Link Tutors”, an after-school centre created to help improve the academic performance of secondary school students.
Commenting on the new episode of Airtel Touching Lives, Director, Corporate Communications and CSR, Airtel Nigeria, Femi Adeniran expressed Airtels delight to be a part of the journey of unyielding determination and passion.
“Seguns determination, resilience, and enthusiasm for education demonstrate the spirit of Airtel Touching Lives, and we hope that his story will inspire our viewers to pursue their dreams, no matter the odds”, he said.
This instalment of the programme will also include a segment on Irede Foundation, an Airtel Touching Lives beneficiary from the previous season.
The non-governmental organisation provides young children with prosthetic limbs and helps to prepare them for a self-reliant living and, this Sunday, the series will review the progress the foundation has made since Airtels intervention in 2022.
Airtel Touching Lives continues to showcase extraordinary individuals like Segun, who have not only overcome personal challenges, but have also dedicated themselves to improving their immediate environment.
With Airtel Nigeria’s commitment to empowering lives and making dreams come true through Airtel Touching Lives, the telecom giant has restored hope for countless vulnerable individuals and families across the country, encouraging other corporations to commit more resources towards making positive social impact.
Airtel Touching Lives Season 7 is broadcast on Sundays on four national and cable TV channels, and one streaming app.
The platforms include African Magic Urban at 5:00 pm, NTA Network at 6:30 pm, and Startimes Channel 108 at 6:00 pm.
Re-runs are broadcast on Tuesdays on African Magic Urban at 3:30 pm, and on Wednesdays on Startimes Channel 108 at 6:30 pm. Current and previous episodes are also available to stream on Airtel TV.

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Agency Seeks Collaboration For IoT Unlock

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The National Information Technology Development Agency (NITDA) has emphasised the need for collaboration to unlock Nigeria’s potential in Internet of Things (IoT) and its revolutionary impact on the countrys digital ecosystem.
Director General of NITDA, Kashifu Inuwa, who disclosed this is in a bid to implement the Digital Transformation pillar of Strategic Road Map and Action Plan (SRAP 2021-2024) of the agency.
Inuwa made this plea while delivering his keynote address at the IoT West Africa Conference and Exhibition 2023 in Lagos State, recently.
The DG noted some challenges that need unlocking in order to access the potentials of IoT, especially infrastructure, cyber security, and data protection, stating  that most IoT use cloud-based solutions  Alexa, Google, and others.
According to him, todays computer systems are outperforming humans in many endeavours, especially the rise of generative Artificial Intelligence (AI), chat GPT, etc.
He said that is the fabric of the shift humanity is witnessing in accelerating the convergence between physical, biological, and digital world.
“Looking at the areas you can apply them, such s in agriculture, we need to increase our agri-products, and IoT can help us to do that with lesser human efforts”, he said.
He explained further that there are wearable plant sensors at the moment, which is one of the top technologies in 2023.
The NITDA boss hinted that farmers can have a sensor attached to their plant to manage its health, watering, fertilizer, pesticides, and this would invariably enhance the increase of food produce.
He asserted that by 2050, Nigeria will be the third largest population in the world, therefore, there is need to explore how we can use IoT to increase the countrys food production.
In addition to agriculture, the NITDA Director General discussed the role of IoT in addressing security challenges, saying that IoT devices can monitor activities.

The DG emphasised that IoT could be utilised to enhance oil theft prevention by monitoring pipelines and sending alerts for quick security response.

He advised that there is also the need to develop the talent within the country.

 

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ALTON Hails NCC Boss Over Quality Regulation

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The Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, has praised the leadership of the Executive Vice Chairman/Chief Executive Officer of the Nigerian Communications Commission (NCC), Prof. Umar Garba Danbatta.
He also commended the NCC’s commitment to quality regulation, attributing the success of the telecom industry in the country to the regulatory environment it enjoys.
Speaking at a meeting with mobile network operators on the implementation of the Expanded Revenue Assurance Solution (ERAS) in the telecommunications industry, held at the NCC’s office in Lagos recently, Adebayo expressed his pleasure in what he called Danbatta’s remarkable administrative skills, challenging the notion that engineers are not good administrators.
He described Danbatta as an excellent administrator, highlighting his instrumental role in the growth and development of the telecom industry.
Addressing the audience, Danbatta shared details about the implementation of the ERAS project.
He emphasized the collaboration between the NCC and the Infrastructure Concession and Regulatory Commission (ICRC), saying the ERAS project is being carried out through a Public-Private Partnership (PPP) arrangement, following the  Design, Finance, Develop, Deploy, Operate, and Transfer (DFDDOT) model, as recommended by the ICRC.
Danbatta acknowledged the efforts of the NCC in transforming the dream of the ERAS project, conceived in 2007, and nurtured to reality.
He also underscored the project’s alignment with the Federal Government’s directive to enhance revenue collection and prevent leakages within ministries, departments, and agencies (MDAs).
By deploying the Revenue Assurance Solution, Danbatta said the NCC aims to optimize the revenue payable by licensed telecommunications service providers, thereby bolstering revenue generation for the government.
Initially designed to focus on telecom operators, who have not only become major industry players, but have also expanded their services to to the digital services ecosystem, the ERAS project underwent a significant expansion.
In June 2022, following a presidential approval, the NCC was directed to broaden the scope of the project to encompass the activities of Digital Economy stakeholders. Consequently, the project was renamed the Expanded Revenue Assurance Solution (ERAS).
The implementation of the ERAS demonstrates the NCC’s commitment to fostering transparency, accountability, and financial efficiency within the Nigerian telecom and digital services sectors.

Through the utilisation of accurate data and information, the ERAS aims to eradicate wrong computations, faulty data, and information leakages.

With the telecom industry playing a critical role in driving economic growth and enabling digital transformation, the ALTON Chairman’s commendation and the ongoing efforts of the NCC under Danbatta’s leadership highlight the commitment to creating an enabling regulatory environment that fosters innovation and sustainable development.

As the implementation of the Expanded Revenue Assurance Solution progresses, stakeholders within the telecom and digital services sectors eagerly anticipate its positive impact on revenue generation and the overall growth of the Nigerian economy.
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