Outsourcing is one of the many recently discovered practices of business management. It came into play for nearly a decade. More and more companies are turning to outsource for growth and development whether they are big or small.
However, there is no clear answer as to whether outsourcing comes in the ethics of business and marketing, but has undoubtedly become common today.
WHAT IS OUTSOURCING?
Outsourcing is the practice following which companies have certain jobs done from outside the company instead of having it done inside the department. The function or job can be outsourced to either a company or an individual.
In other words, the strategy of having functions done from outside the company by a third party and yielding results from it is called outsourcing.
WHY DO COMPANIES OUTSOURCE?
Business is all about implementing strategies and making the most of them. Companies or business firms look for opportunities that can provide them with maximum profit and growth. And since outsourcing has become so common, it must have some benefits to the companies.
Here is a list of some benefits outsourcing serves to the practicing companies:
- Cost Saving: The external company, you have outsourced your job to must have expertise in the particular job and hence they will have your job done in lesser money than what you would have invested.
- Saves Resources: Your company’s resources through outsources will ultimately be saved since the other company has taken over the complete charge of the work.
- Increases Efficiency: When a job is outsourced it is basically outsourced to that company that has expertise in that certain job and hence they will be efficient towards their job in regards to time as well as efforts.
- Attention towards Core Areas: When you outsource a job it makes you free to think about the areas you are good at and that need improvement from your side. It saves you energy as well as time to concentrate on your brand.
- Quality Service: The outsourced job is often better in quality and functionality.
WHAT ARE THE MAJOR TYPES OF OUTSOURCING?
On a broader category, outsourcing is of 3 types:
- Local Outsourcing: Local outsourcing refers to the outsourcing when the company you are handing over your tasks to is in the same country as yours. This is also known as onshore outsourcing.
- Offshore Outsourcing: Outsourcing of a function from your country to a country in a foreign land that too very far away is called offshore outsourcing. Usually, such two countries have nothing in common and outsourcing is completely professional.
- Nearshore Outsourcing: outsourcing of functions from a company to another company in its neighboring country is called nearshore outsourcing.
WHAT ARE THE MAJOR COMPANIES THAT PRACTICE OUTSOURCING?
There are a large number of companies that do outsourcing including many giant companies.
In fact, according to Capital Counselor, larger companies are 66% more likely to outsource than small businesses.
Names of a few large companies that outsource are:
Outsourcing has helped in the growth of many companies and has converted small businesses into large firms. Outsourcing not only helped industries but has also contributed to globalization. With so many benefits outsourcing has become the fastest growing business in itself on a global level.