What is Outsourcing?
Contracting with a vendor to provide a service rather than providing it
yourself
Outsourcing, in literal terms, means sourcing from outside. It is the contracting
out of a company's non-core, non-revenue producing activities to specialists.
Principle types
Traditional outsourcing
Here the routine jobs or tasks that the staff of the organization does not perform are identified and the service provider usually hires staff for this job.Greenfield outsourcing
Without hiring the service provider the organization can directly hire an imminent company which can execute their business which was not done in the organization internally.
Common types
Information Technology (IT) Outsourcing
- Web site development
- Seo and internet marketing services
- Software development
- Network backbone services
- IT remote support
Business Process Outsourcing (BPO)
- Call centers
- Payroll
- Finance functions and activities
- E-publishing
- Book keeping services
- Accounting
- Human resources
- CAD services
Factors
For an organization the decision to outsource can be brought about by a number of factors:
- Heavy workload
- Lack of time or urgency
- Lack of expertise
- Deplorable cost to perform services
- Shift to new technologies and/or existing technologies
- Add to existing staffing levels hastily
- Focus on operational, functional, or technical limitations
- Return the focus of staff to core capabilities
- Hasten benefits by rapidly employing services or projects
- Trim down costs in an explicit functional area
- Increase service levels
- Reduce capital costs
- Cut recurring operational costs
- Enable business tactics and/or transformations
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