The Inside Dope Of Outsourcing - The Outsourcing Definition
There are times when the companys activities are getting out of hand
. When the business grows, there are more and more things to do. But of course, naturally and practically, business owners would want to cut the hiring of more and more employees because more people in the company mean more wage costs.At this point in their journey, business owners should be educated about outsourcing. The outsourcing definition is pretty simple. It is the act of one company contracting with another company to perform tasks which are otherwise done by in-house employees. More often, these tasks can be performed inside the company but there are financial advantages by outsourcing it. There are already companies, especially the large ones that outsource their call centre and payroll services. These are done by companies who are highly specialized in that field.
There are many possible reasons for outsourcing but the most common reason would be to save money. The fact stands that there are outsourcing companies that offer services that are cheaper than having to increase the salary of your own employees. It is because most of the outsourcing companies do not focus on the benefits of their employees and often times, they have lesser overhead costs.
The outsourcing definition also includes the types and kinds of outsourcing. First, there is the Business Process Outsourcing or also known as BPO. This kind of outsourcing caters to receiving customer calls and processing insurance claims. Second, the Knowledge Process Outsourcing which involves a much higher set of skills such as reading X-rays, interpreting graphs of stocks and bonds, handling the accounting tasks of the company and designing engineering projects. The third type of outsourcing is Information Technology Outsourcing. It is the outsourcing responsible for Internet-related tasks such as programming. Lastly, there is the Software Development or Software R&D. This type of outsourcing caters to the creation of software application that can be used in business activities and transactions.
Along with its advantages, outsourcing has also its cons. One of these is losing a direct communication between the company and their targeted customers. This prevents the company to build a solid relationship with their customers and oftentimes it may lead to the frustration of either the sides. Also, there is danger of not being able to control some aspects of the company activities. If you chose the wrong outsourcing company, you will end up with delayed communication and project implementation. The process also puts highly confidential information at risk. Often, the company becomes very dependent with their outsource providers which becomes a problem the moment the outsource providers back out on the contract all of a sudden.
It is important to know and consider this outsourcing definition as it is very vital to have a clear background of what the process really is. Sun Tzu said in his famous Art of War to study your weapon. Venturing into outsourcing can either make or break your company. Without proper education about the matter, it may lead to severe problems. But, with thorough study about what outsourcing really is, it may become your sharpest tool to help your business grow.
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