Benefits and Reasons of Outsourcing: Outsourcing is the process in which, a company contracts a specific business process to a third party company. In this process the clients inform their provider to, what they want and how they want the work to be performed. For example, a manufacturing company can outsource a product design from an engineering company. In recent times outsourcing has taken many forms. Outsourcing companies are most commonly known as Business process outsourcing (BPO) and Information technology outsourcing (ITO). These are the most common forms of outsourcing. Business process outsourcing includes the services like ‘call enter outsourcing, Human resource outsourcing, Finance and accounting outsourcing’ etc.. let’s see what are all the benefits and needs of outsourcing.
The first and most basic advantage of outsourcing is to reduce the production cost of the product per unit. Due to that most of the companies are needing to outsource their business to those countries where the labor cost is cheaper and the government is giving the relaxation to the manufacturers. Outsourcing can also be effectively used in instances such as, the company may not like to hire and train the additional staffs, because of downtime in selecting a candidate and grooming them for business processes is both time intensive and costly. So they prefer outsourcing, because it is a better solution to overcome such problems.
And if the company has many business functions, they couldn’t give their full concentration to every business functions. They want to concentrate more on their core business function, so by making use of outsourcing they can concentrate on providing better quality of products and services to their respective market. Overhead cost of performing some back-office functions are extremely high in some companies. So for reducing such overheads these functions will be outsourced. High employee turn over will make an uncertainty and inconsistency in the business processes. But outsourcing will provide a level of continuity to the company. When a company takes up a big project and if their employees are not having the sufficient skill sets to cope up with the new project it becomes an inconsistent situation. At that time the company may go for on-site outsourcing, they may hire people who are having the skills required by the new project. These are the primary reasons and benefits of an outsourcing. And the success of an outsourcing depends on three factors, they are ‘proper executive level support from the client’s organization, Frequent communication between the client and the company, and Client’s ability to manage and handle the service providers.
In summary, Outsourcing doesn’t only help us to save money, it also gives us the push needed to walk and step towards, winning the competitive market.
About the Author
Author Mr. Shiva Kumar is an experienced outsourcing expert. to know more about visit him at www.cainfotechindia.com/aboutus.html