Outsourcing

Outsourcing is mainly a process where one company contracts some of its work to another company. In other terms, one company contracts another company to provide services that might otherwise be carried out by internal employees of the company. A very easy example is the call center industry and freelancing writing; most companies outsource such jobs to companies in countries where it would cost them less. So basically outsourcing is done to save money, besides other reasons, which will be discussed in this article.  However outsourcing allows companies to focus on main business issues while the minor details are handled by external experts.

This saves organizations from burdening their in-house management with extra and needless responsibility to focus on more important issues. Companies that handle outsourced work are specialized in their fields and their work is usually streamlined, these companies come with world-class capabilities and have access to new technology which the outsourcing companies couldn’t afford to buy or deemed as an extra expense. For example, it would cost much less for a company to outsource its payroll service to other companies on contract basis than get extensive manpower and technology to do it on a monthly basis. Many of the companies who provide outsourcing services do it considerably for lesser money as they have fewer overhead expenses. Outsourcing is also now being interchanged with the word off-shoring, when in fact that shouldn’t be the case. When you say you’ll outsource something that means you will have a role or task done outside your company, it can be within your country or outside. When you say off-shoring, it is outsourcing something outside your country.

Reasons for Outsourcing

Most organizations that outsource are basically seeking to address some of the following issues.