What is Outsourcing?

Posted on Nov 02, 2015 by admin

Every entrepreneur dreams to reach the mountain peak of their careers at some point of their venture. Who wouldn’t? after all, every dedicated businessman deserves to be successful as they not only invest their money to the business, but also their time, resources, expertise, and most importantly, their efforts – just to be ahead of the game. Countless businessmen have scratched their heads every now and then, trying to make the most of their business chunks in order to come up with something brilliant, productive, systematic, and of course, profitable.

True enough, the worldwide trade is tangled with smart professionals who make the world tick and every so often, they contribute largely to the advancement of major commercial trends.

Today, outsourcing has become a major hit to the market and just like a blockbuster movie hitting the big screens, more and more entrepreneurs are being persuaded to join the craze. But is it really just a passing trend? or a smart business move that is meant to last long-term?

Before we dig deeper, let’s touch the basics of outsourcing.

What is outsourcing?

Outsourcing is the practice of transposing a particular business function to another supplier instead of doing it internally. This is done so to reduce cost and save space and utilities. For instance, if you are an owner of a startup business who wants to minimize cost and still get the same work value, you might want to outsource your telemarketing roles to a staffing solutions agency. These days, this is how most businesses work.

How does outsourcing work?

Most professionals consider outsourcing as a cost-effective strategy especially when it is used wisely. More often than not, it is more beneficial for a company to purchase goods from third party providers rather than producing it internally. For instance, a corporation that manufactures computers would be better off bargaining for motherboard components from other manufacturers instead of paying largely on production costs. In the same sense, some businesses may opt to outsource their financial duties to a different accounting firm as it will be more cost-saving than to get an accountant in-house.

Is outsourcing the same as offshoring?

Although we understand that outsourcing denotes contracting work to other providers, offshoring may not mean totally the same thing. It does fall under the umbrella of outsourcing but highly focuses on doing so overseas. Offshoring has become a major trend as most companies find it more efficient to offshore jobs in terms of cost and efficiency. Some of the most popular offshoring destinations are India and Philippines. They are known to be a great hub for call center and virtual assistant jobs. Philippines, for example, has a culture very close to the western civilization so  American companies are more comfortable outsourcing jobs to Filipinos. India, on the other hand, has a strong foundation of very techie people so many companies depend on their help when it comes to technical support.

If we are to trace its roots back in the days, outsourcing was first utilized by large manufacturing companies such as automobile makers and machinery enterprises. Because of their product’s high demands and manpower shortages, these establishments were able to hire staff from third party agencies. Over the years, most of these companies have begun to outsource their factories to foreign countries. These days, our idea of outsourcing is no longer limited to large manufacturing businesses. Even specialized services such as marketing, sales, and business development functions are already being outsourced.

what is outsourcing

Here are the most common functions that can be outsourced:

  • Call Centers
  • Customer Support
  • technical Support
  • Virtual Assistance
  • Web Programmers and Designers
  • Human Resources
  • Medical Professionals
  • Computer Professionals
  • Multimedia Development
  • Sales and Marketing
  • Consulting and Engineering
  • Writing and Editing
  • SEO and Social Media
  • Graphic Design
  • Desktop Publishing
  • Financial Services
  • Legal Services
  • Administrative Services
  • Advertizing and Public Relations

When is the best time to outsource?

The right time scale for outsourcing may be different from one company to another. If you can manage your team just right and you have all the time to handle the core components of your company without needing help from the outside, then you may decide to hold off outsourcing just yet. Alternatively, if you are no longer able to carry on without needing help from other service providers, then you may want to consider outsourcing by all means. It should be a smart investment and a great way to pursue growth.

It is undeniable that outsourcing has become the global trend in the market today. But the question is: Is it really a good idea to outsource delicate roles?

Despite the fact that outsourcing has a lot of advantages to offer, it also has a number of inherent disadvantages. For example, if you don’t outsource to the right people, you may end up spending more than saving. It is not everytime that you can successfully outsource jobs and get favorable returns. That is why it is important to outsource smart.

Now if you’ve been torn with the thought of juggling your business needs and you need some help in your marketing and business development, outsourcing them may be a great idea. That way, you will be able to concentrate on things other than those core components, such as increasing motivational bonuses to your workforce or doing what you are best at.

In addition, winning sales is a very critical process. Entrusting your sales funnel to a third party provider can make you open up yourself to other ideas that are very helpful and pre-analyzed. After all, you don’t have to carry the load on your own. Partnering to other providers who can take care of the lead generation to nurturing them until you get a sales is definitely something that can take you a notch higher.

Indeed, running a business is no plain joke. And in the world where online visibility is becoming much of a trend, outsourcing some or most of your business functions might just be your lifesaver and surely, it is going to conquer the marketplace for a very long time.

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