What is Outsourcing?
“Outsourcing is the process by which a company contracts another company to provide particular services. These services/ functions would be otherwise carried out in-house, by the company’s own employees.”
Call centre services, payroll, maintenance etc are some of the kinds of work typically outsourced. * Importance of Outsourcing:
There could be several reasons why companies outsource work. But the foremost reason is the money it saves. Many service providers can offer to get the work done at lower costs, as they have fewer overhead expenses and perhaps operate in a different economical environment.
In outsourcing, it is often narrow functions such as payroll, data entry etc that are given to specialist vendors. These specialist companies can therefore do the work more efficiently as they have specialized tools, facilities and personnel trained for that particular kind of work.
When a company outsources peripheral work, it is able to concentrate on core business issues. The details are taken care of by specialists, and the company’s own management professionals have more time and resources at hand for working on the most crucial issues within the company. Outsourcing is also an excellent option to a company that plans to expand geographically, as the company can start its operations in a different country more inexpensively through a local provider. * Why outsourcing is to be used:
Some important points are discussed here * Get access to skilled expertise:
One of the primary reasons for a business to outsource a task is when it requires specific skills and expertise that may not be its core competence of its business. To allow you to focus on your mission of providing high quality products and/ or services to your customers, it only makes sense to outsource skill-specific tasks to experts who can perform it