What Outsourcing Means To Business
Services and industries are adapting to the development brought about by outsourcing. Outsourcing simply means that a company chooses to let a third party company to run a certain process in their business that can also be done by their in-house employees, such as IT outsourcing. Outsourcing is continuously rising as the years go by and many large and medium scale companies are getting involved in this type of business. An example of jobs being outsourced are call centers who run services such as technical support, credit cards, medical transcription, and even bill payments. Different companies handle the different jobs or some companies have similar jobs but cater to different clients. Outsourced jobs and services are usually situated offshore or overseas, most often than not at developing countries as well.
Outsourcing has been around for quite a while but it was only in recent years that bulks of specialized services have been outsourced overseas. Specific specialized services like company payrolls, billing and data entry are outsourced in order to have these services done more efficiently. Being efficient and cost effective are the advantages of specializing a specific service process. Lower operational costs and specialized services are some of the main reasons why foreign companies resort to outsourcing.
There are many other reasons why companies start outsourcing jobs and services but the most important and most well-known advantage seems to be the fact that outsourcing, often times, saves money, a lot of it. Many of the companies prefer to outsource services to developing nations where salaries and benefits are not as high as in the original location. Minimum wages of outsourced jobs like that in the Philippines is nowhere near the minimum wage to that of employees in the United States. Benefits such as health care, bonuses, wages costs much lower if you outsource at developing countries than availing them at the business’ original location.
Outsorcing comes in many forms but the most popular ones are called information technology outsourcing and business process outsourcing. Outsourced information technology services often means the transfer of computer and internet related labor. This form of outsourcing creates jobs for programmers, web site developers, and other technology related professions. On the other hand, business process outsourcing involves call center outsourcing, human resources outsourcing, investment and accounting outsourcing, and claims processing outsourcing. IBM and Accenture is involved in business process outsourcing and they are just a few of the big named companies who are into this type of business.
Of course outsourcing is not without its disadvantages. Detachment between the company and the client relationship is one of the main disadvantages of outsourcing. These days services like customer care for businesses’ products and services are the most sought after outsourcing jobs. One of the disadvantages of outsourcing is the loss of opportunities in the mother land because most of the jobs are being outsourced to developing nations. The information was given by a businessman of web design and SEO.
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