Outsourcing creates competitive advantage by managing the organisation's non core functions to enable the organisation to concentrate on its core business. Outsourcing has become the new concept in the business world that strengthens the competitiveness, improves the economic growth and increases performance of the organisation. The large companies of United States and Western countries have realised the importance of outsourcing in sustaining the growth in the competitive world. In the global economy, the concept of outsourcing has been changed from solving problems to transforming the IT functions of the organisation. The transformation function of the outsourcing has influenced the management strategy of the organisation.