Outsourcing is considered as a planned usage of external resources which helps in performing the activities internally. It is a common way for businesses to attain their core objectives like earning more revenue by increasing income and dropping the cost. But remember that outsourcing does not mean to hire immigrants.
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Types of Outsourcing
There are mainly three types of outsourcing:
In-source: In this, the outsource is done to a party within the country. For instance, if you have a company in Tampines and your outsourcing party is from Bishan then it is considered as in-source outsourcing.
Near-source: In this type of outsourcing, you hire a workforce from a neighboring country.
Out-source: In the out-source, you hire a party far from another country which is far from where you are situated.
Common services of outsourcing
There are a few common services of outsourcing:
Professional services: This type of service includes payroll & tax, customer support, accounting, office administration services, lead generation & marketing.
Project services: Project services include project appraisal, planning, staffing & training, and monitoring & controlling.
IT services: Technical management & support, infrastructure development, application & software development, web development & hosting and telecommunication are some examples of IT services.
Manufacturing services: This type of service include supply chain management, labor management, part manufacturing & assembling, research, facilities management, etc.
The reason behind companies outsource
There are a few reasons that reveal why companies outsource:
- Avail skills that are unavailable internally: As a newly established business and SME, there are chances that you might not have complete internal resources for smooth daily actions.
- Best usage of internal resources: To successfully enhance the productivity of internal employees, it is recommended to focus on their role and pass on some workloads to outsource.
- Reduction of cost: Being a business owner, it will cost you less to outsource rather than hiring an employee.
- Enhanced business or customer attention: There are few businesses that only pay attention to certain functions such as client relations. As a result, they require to outsource other operations that will draw their focus.
- Augmented business procedure: Businesses need to choose to outsource so that they can function smoothly and grow rapidly.
Incredible Advantages of outsourcing
- Attention on main competencies
- Access to high ability resources
- Staffing flexibility
- Imaginative & flexible solutions
- Quick time to market
- Affordable and probable expenses
- Ability to avail best practices
- Easy transfer of knowledge to permanent staff
How you can maximize the value of outsourcing?
In order to maximize value from outsourcing, you should always have a clear purpose of outsourcing. Before outsourcing, know what are the budgets of your company and is it willing to spend more or not.
Therefore, outsourcing can be beneficial for your company if you initiate, plan, and implement it well.