Outsourcing Your Business

Outsourcing in a Nutshell

2017-09-17T09:56:00.000-07:00

Outsourcing became part of the business lexicon during the 1980s. It refers to the delegation of non-core operations from internal production to an external company. Outsourcing is transforming whole industries and changing the way we work.

What is Outsourcing?

Outsourcing, in literal terms, means sourcing from outside. Outsourcing is contracting with another company or person to do a particular function. More than just cost-cutting, outsourcing is a strategic initiative that can re-shape your business. Typically, the function being outsourced is considered non-core to the business, and therefore, your company may benefit in the long run by freeing up workers and job functions.

History of Outsourcing

Outsourcing has been occurring for decades. Once a dirty word in the workforce, outsourcing has become more acceptable, as long as it doesn't drive down wages of already hard hit economy. In the US in the 1970s, it was common for computer companies to export their payrolls to outside service providers for processing. This continued into the 1980s, where accounting services, payroll, billing, and word processing all became outsourced work.

Benefits of Outsourcing

Not many businesses thoroughly understand the benefits of outsourcing. Outsourcing reduces overheads, and frees up resources. Outsourcing also minimizes capital expenditure, and eliminates investment in fixed infrastructure.

Types of Outsourcing

Typically, there are two types of outsourced services: technology and business process. Information technology outsourcing has come a long way in the last 15 years. IT outsourcing has grown in popularity as an efficient, cost-effective, and expert solution designed to meet the demands of growing tech needs in the workforce. Business Process Outsourcing is the contracting of a specific business task, such as payroll, to a third-party service provider. Many firms are investigating business process outsourcing for back-end processes as a way to cut costs and focus on core competencies.

Conclusion

Outsourcing is transforming whole industries and changing the way we work. Outsourcing is an increasingly popular practice among businesses seeking to cut operating costs and free up their workforce. Some argue that the outsourcing of jobs (particularly off-shore) exploits the lower paid workers. However, outsourcing both creates and destroys jobs, in that someone is getting a job and someone is surrendering a job, at the same time it allows for companies to focus on core competencies.

HR Outsourcing for the Growth of Your Business

2007-09-21T07:27:00.000-07:00

Human Resources (HR) Outsourcing isn't just something your business has to do in order to fix a broken hr department. It doesn't have to happen because the hr department in your business is overworked, understaffed, or underfunded. On the contrary--HR outsourcing can take place in an effort to grow your company.

In an article in CRMBuyer, written by Jessica Martinez, the coffee giant Starbucks is doing just that. "This is probably one of the first deals I know that was signed because of the client's need to grow, rather than fix a broken platform," the article contends.

Starbucks is partnering with HR outsourcing firm Convergys. We can only guess at how much this deal is worth in terms of cost. The article posits that the deal could be worth upwards of $350 to $400 million, and the low end of the estimate. Realistically, the HR outsourcing deal with Convergys could be worth much more.

This obviously bodes well for the HR outsourcing industry. If a large corporation like Starbucks sees the value in outsourcing their human resources department, then more and more companies, large and small, are sure to follow, especially when we see that Starbucks is using HR outsourcing as a way to improve and grow their already successful business.

(Article cited can be viewed by clicking here)

Does Your Business Need Security Outsourcing?

2007-09-20T20:54:00.000-07:00

Internet security is a huge concern for the average Internet user, but it should be a humongous concern for a business. With the increase in hacking, as well as malware, Internet security should a primary concern for businesses doing business in the 21st century. This is the age of information, and the primary source of information is the Internet.

Every business these days needs to be concerned with Internet security. Those businesses not capable of providing Internet security for their customers can consider security outsourcing. An article in InfoWorld details this very topic.

The article is titled "Security Outsourcing on the Rise" by Matt Hines.

In the article, Hines contends that "Faced with an ever-changing IT threat landscape and increasing pressure in the form of compliance mandates, businesses worldwide are getting over their fear of leaving security in someone else's hands and choosing outsourcing as a means to solve their problems, Wipro executives said."

Businesses are dealing with the ever increasing threat against Internet security.

According to the article, "Attacks are getting more sophisticated, data leakage has become a huge concern, and customers understand that constantly implementing new policies and technologies has become a challenging task...."

Some companies see the benefit of security outsourcing. Some of the areas of "...rapid growth for the firm are such projects as access management, security event management, data monitoring, and compliance automation...."

Hines contends that "Outsourcing is growing in general, and some companies are finding that if they can offload some routine tasks like firewall management and handling of intrusion detection alerts, they can spend more time reacting to emerging business needs...."

Call Center Outsourcing

2007-09-19T09:24:00.000-07:00

Call center outsourcing has become a business model widely endorsed by successful organizations worldwide. Global organizations like GE, American Express, Sprint, Dell, AOL, and Amazon are realizing that the cost factor is just one of the benefits generated by call center outsourcing. However, outsourcing to a reputable call center outsourcing is an important decision.

Call centers can be located almost anywhere, allowing companies to take advantage of time zones and cheaper labor rates in different states and countries. For many small, medium and large businesses, outsourcing a call center is an excellent way to generate sales and help current customers with tech support and customer support issues. Some of the services offered by call center outsourcing companies can include customer support, operator and/or directory assistance services, multilingual services, credit related services, inbound and/or outbound telemarketing, fulfillment services, Return Material Authorization (RMA) services, and reservation services.

A company seeking to outsource their call center may find several benefits including improved customer service levels, reduced customer support/marketing costs, higher sales conversion rate, homogeneous and clearly defined processes across geographies, and greater coverage and number of interactions with customers. A company may also experience increased call capacity to eliminate busy signals and long hold times.

By utilizing call center outsourcing, a company will manage to have, on one hand, a controlled and efficient solution in terms of costs, and on the other, to keep and improve the quality of their services. Plus, they can get access to a highly-skilled workforce without having to bring them onto their payroll. In the end a company, whether great or small, can eliminate the frustration and expense of maintaining their own Inbound internal call center, allowing capital to be redirected to the core business.

Information Technology Outsourcing

2007-09-17T12:17:00.000-07:00

Many corporations are outsourcing Information Technology jobs in the United States to consulting firms or offshore organizations. Information technology outsourcing has grown in popularity as an efficient, cost-effective, and expert solution designed to meet the demands of systems

Information technology outsourcing occurs when an organization contracts a service provider to perform an IT function instead of performing the function itself. This can be to a third-party provider that is either onshore, near-shore, or offshore. Because of the high talent pool, and low labor costs, more and more firms are opting for offshore information technology outsourcing to countries such as India, China, and the Philippines.

The biggest benefit to information technology outsourcing is the cost savings. A company does not have to pay for benefits of outsourced workers. A company can also pay outsourced worker far less than they would an in-house IT team. Staffing levels can also be adjusted quickly in accordance with the companies needs. An IT outsource company can also provide 24 hour support with low cost incurrence.

Outsourcing your help desk can be a powerful tool for achieving a competitive advantage. Information technology outsourcing can provide a company with a highly skilled, low cost IT help desk that can be available 24 hours per day, 7 days a week, at a cost savings.

Business Process Outsourcing

2007-09-17T11:10:00.000-07:00

What is Business Process Outsourcing? It is the contracting of specific business tasks, such as accounting, to a third-party service provider. Many firms are investigating business process outsourcing for back-end processes as a way to cut costs and focus on core competencies.

Business process outsourcing has been around for decades, but only recently have companies seen its full potential. The main motive for business process outsourcing is to allow the company to invest more time, money and human resources into core activities and building strategies, which in turn can fuel company growth. Business process outsourcing makes a company more competitive, and achieves cost reduction and improves efficiency.

There are different types of business process outsourcing. These can include human resources, information technology, and accounting. Business process outsourcing can be outsourced either within the US or, as is most commonly occurring, abroad. The perceived cost reduction that drives business process outsourcing will continue to grow, as companies themselves continue to expand.

Companies continue to turn to business process outsourcing firms to handle non-essential day-to-day business tasks. This is a trend that does not seem to be diminishing despite it’s perceived threat to the current workforce. On the contrary, most companies see business process outsourcing as a way to enhance their business, and improve productivity, thereby adding more jobs rather than taking jobs away.