Outsourcing And Offshoring-The Order Of The Day

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Outsourcing And Offshoring-The Order Of The Day

Many companies are now cutting costs with the help of outsourcing. Outsourcing means transferring a business process to an external agency. This results in a better quality product and innovation in services. Offshoring is a well-known term and it’s a type of outsourcing in which work is sent to companies in another country.

Let us look at the top advantages of outsourcing

  • Access to expert staff
    It indicates that a company is transferring its work to a firm which has the workforce which has expertise in the concerned field.
  • Focus on core areas
    When a company transfers its ancillary work to an agency then the employees of the company have more time left for core areas.
  • Improvement in risk management
    When work is outsourced then both the companies share the risk and the burden of the company which is outsourcing is reduced.
  • Improve the efficiency of the in-house team
    When the workload of the employees of a company is reduced then the company can spend more time on improving the quality of its workforce and put the workforce to better use.

Offshoring to ensure the work never halts

When work is off-shored to a country and it works on a different time zone then the wonderful thing that happens is that the business can remain in operation for all 24 hours. When employees in one country have gone home the workforce of the company to which the work is outsourced continues working on critical deadlines.

Overhead expenses

Outsourcing can reduce overhead expenses such as the money required for a bigger office. In spite of spending big bucks on a new and bigger office, the company can save money by outsourcing data entry work.

Giving your company an edge over the competition

Competitors who are not into outsourcing are more pressured, and spending more on overheads and not offering great quality products and services, therefore you are doing better than your competitor just because of outsourcing.

Before we end up, let us talk about the five things to keep in mind before outsourcing. First is why do you need to outsource. You can think of outsourcing if you want your company to continue being small despite its increasing market presence. Also, you should outsource if your company lacks the expertise required for a particular project or if your company people are unsure about which product sells and which incurs losses. Next, the important thing is what should you be outsourcing.

Most of the time companies outsource data entry and call center work but software development and healthcare and engineering processes are also starting to be outsourced. Then come the questions of when and where to outsource. The correct time to outsource is when you want your staff to concentrate on core competencies or when you need expert advice. When thinking about where do you need to outsource you should look for cheap and skilled labor which provides timely deliveries. The last thing to keep in mind is that you shouldn’t hire the agency charging the least just like you probably would not go for the agency charging the most.

In simple words, outsourcing refers to getting our work done by the third party whereas offshoring refers to getting your work done from another country. It’s always possible to outsource the work but not to offshore it.

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