Business Process outsourcing involves a contract where a third party may also be involved to provide necessary services. Most generally the company of Coca Cola is associated with business outsourcing. At a preliminary stage this can be considered as a cost cutting technique for many countries. This involves setting up of a business in a foreign country. If the country is far off then it is called 'offshore outsourcing' and if it is a neighboring country then it is 'nearshore outsourcing'. Suppose the United States sets up an industry in India, here if the America had to pay in terms of dollars for its work then the cost would go up but if payment to the Indian workers is made in rupees then a lot of money can be saved by the American businessmen. This logic is possible only when the country setting up the firm is at the advantage side in the exchange rate calculation.
