Outsourcing is a a common business practice where a company hires a third party to perform specific functions that are traditionally performed in-house by the company itself. There are tons of benefits of outsourcing. In this blog, we will be discussing what is outsourcing and how does it work
Outsourcing is a practice that has time and again saved businesses from being heavily burdened by financial and manpower restrictions.
Outsourcing is the practice in which a business hires a third party for specific operations. This can be done by hiring a domestic company or an international company depending on the requirements and budgets.
It allows businesses to grow and better their core operations rather than focusing on all secondary tasks. It’s financial as outsourcing is much cheaper than hiring and training a team for specific tasks.
That’s why, in the last decade, several companies, big or small have been seen to outsource their secondary tasks for various reasons such as expertise, accessibility, and budget.
Example of Outsourcing
Businesses usually outsource to save money.
Let’s say there’s a company that needs transcription services to produce text files of their meetings and phone calls to keep records. If they hire a transcriptionist for the job, they will have to pay them monthly, give them the benefits that come with the job, and would have to train him if necessary. This may increase their operations cost more than just hiring a transcriptionist company and sending them the files that need to be transcribed every month. So why spend so much money if what they need can be done in a single transaction each month?
Quality Transcription Service is within your budget now as Servixer is excited to offer this with unmatched affordability.
Benefits of Outsourcing
The biggest and most obvious advantage of outsourcing is that it saves money. The job can be done with high quality at a lower cost. If you decide to outsource offshore you can benefit immensely from the difference in wages between western countries and Asia. Let’s take Pakistan for example, the wages are substantially lower here but the quality of the service remains top mark. So you will be getting your work done at a fraction of the cost.
Outsourcing can help your business efficiency on both sides. On one side, you will be giving away the workload of secondary tasks on your staff. It will allow them to focus better on their core activities and their efficiency is sure to increase.
On the other side, if you outsource your services to a professional outsourcing business like Servixer which has the expertise and experience to deal with outsourcing projects. They will get you to work done faster and with more efficiency than you could ever manage yourself.
Focus on your core business
Outsourcing will give you a free mind space and you will have more energy to focus on your core business activities. This way you will have more ideas and you can grow your business effectively without having to worry about pending secondary tasks.
How does Outsourcing work?
The most important function of outsourcing is to give away some functions of a business to a third party. A business must be smooth in its running but it’s impossible to deal with all aspects of your business within your office.
The need for outsourcing arises when a business needs third-party services for their functions either because of the lack of expertise, time, or money within their own company.
These tasks are then signed to a third-party company after making sure that they are reliable and trustable. You can choose to sign a contract with them if you plan on outsourcing for a long time. Outsourcing agreements vary in scope.
In some instances, like programming or content creation, hiring freelancers on a job-by-job basis may be appropriate. However, outsourcing a company’s entire IT department will require a long-term partnership with clear requirements.
Here are some types of Outsourcing that you should be aware of;
Types of Outsourcing
Outsourcing can be done in several ways. It depends mostly on the business process you want to outsource. There are three types of outsourcing depending on the distance between your company and your outsourcing partner. These are;
You can reduce your operational costs by assigning them to a company in a location that is more cost-effective than yours within the same company. This practice is known as inshoring.
Offshoring is when you relocate your services to a company overseas. Offshoring is rather beneficial as different counties have different wages and it allows you to assign your tasks at a fraction of the cost.
Services can also be relocated to a cross-border company and a company nearby. This is known as nearshoring.
Different Kinds of Outsourcing Services
The outsourcing world is great! It ranges from handling minor tasks such as transcription and VA Services for small costs to large firms handling your accounts and Management. You can choose whatever you like, depending on your needs.
Some examples of outsourcing as;
- Outbound Telemarketing
- Web Design & Development
- Inbound Customer Service
- SEO and Digital Marketing
- Virtual Assistant Services
- Recruitment Process Outsourcing
- HR Management
- Sales Support
- And many more