Outsourcing is the process of contracting a business function to someone else. In business, an organization can outsource by recruiting a skilled individual to carry out a particular task or project for a specific period of time. This individual is usually based in another location, and is communicated with via telephone, email or face-to-face meetings.
In order for an organization to survive in any economic environment, it must adopt up-to-date strategies and incorporate a combination of temporary and permanent members of staff, whilst also outsourcing where necessary.
Outsourcing is an appropriate technique to adopt and is essential for the survival of many companies and industries. The cost saving associated with outsourcing is enormous, and it significantly aids a company’s progress. In today’s turbulent economic environment, if companies did not outsource, their survival would be much more difficult.
Other benefits of outsourcing include:
Investments are always risky for any business and recruiting new members of staff is a huge responsibility – and cost, to any company. If a particular recruitment fails, it can cost thousands of pounds in fees. Many companies therefore choose to focus their resources on outsourcing, which reduce the overall risk for a company.
Outsourcing difficult functions
If a company finds a particular area difficult to manage or go out of control, it should consider outsourcing. If an organization is able to identify the areas that are of particular concern, then outsourcing should become an option.
Outsourcing reduces operational costs, as you are not required to pay the individual for certain benefits such as medical insurance, provident fund or a pension scheme. They will not be using a company workstation or other goods, and will therefore be saving a great deal of money.
Many companies also choose to outsource from overseas, as the improvement of e-commerce and the profuse use of the internet has facilitated this. This is also referred to as offshoring or offshore outsourcing, and is a technique that is usually adopted because it is far cheaper than outsourcing nationally.
Improving in-house resources
Sometimes an organization does not have the necessary resources it needs for a particular function. Building up solid and reliable resources can be a challenging and costly task, and it is therefore advisable to outsource to fulfill this function quickly and easily. This is particularly appropriate for new businesses that have yet to build up a solid internal structure.