As outsourcing as grown, the number of outsourcing services has expanded with it. These services can offer a lot of advantages to businesses with an outsourcing strategy that know what to look for.
Benefits of outsourcing
There are a lot of benefits of outsourcing. Some of these include:
- The ability to utilize all the training and capital investments that the outsourcing service has made.
- Greater efficiency and return on investment.
- Projects that are not going as planned can be dropped more easily since there is less of a political or emotional attachment to them.
- Greater flexibility and the ability to concentrate more on the core business.
- Process improvements that come with increased specialization.
Downsides of outsourcing services
Of course, there are also downsides to using outsourcing services. These include:
- Loss of control
- Possible need to share trade secrets
- Having to deal with different time zones, cultures and possibly legal environments.
All of this underscores the need to thoroughly understand outsourcing before undertaking it. An outsourcing service needs to be chosen just as carefully, if not more, than an employee or another partner would be chosen.
Points to consider when choosing an outsourcing provider
Notability and references: It is usually not a good idea to go with an untested and unknown firm. Important projects should always go to a notable firm that can provide references. In addition, make sure they are financially stable and can provide bank records to that effect.
- Experience: One of the advantages of outsourcing is the ability to take advantage of the experience of a firm that is specialized in a task, and thus avoid the mistakes that come from doing a process in house. Only choose companies with expertise in the field.
- Monitoring and reports: Be it onsite or other means, the outsourcing service needs to provide ways for work to be closely monitored and to furnish reports on their progress.
- Sub-outsourcing: Be sure to go directly to the source and never with a firm that will in turn sub-outsource their projects.
- Comparison matrix: To best compare the offers from different outsourcers and get the best price, create some type of comparison matrix that breaks down the various services provided and the costs.
Types of outsourcing services
Most major outsourcing falls into one of the following categories:
- Manufacturing outsourcing: Being something that requires very specialized equipment and skills, manufacturing has long been outsourced by many companies.
- Knowledge process outsourcing (KTO): This involves the outsourcing of knowledge intensive processes. This can include research and development, data analysis and network management.
- Business process outsourcing (BPO): This type of outsourcing has really taken off in recent years. It involves the contracting of a third party to perform an entire business process. This can be anything from human resources to accounting.
Some common BPO outsourcing services
While outsourcing services cover everything from health administration to infrastructure and supply chain, some of the most sought after BPO services are below.
This type of outsourcing includes data entry, updates, tax filing, summary reports and payslip processing. One special advantage of payroll outsourcing is the tax guarantee most providers offer. They will take responsibility for any IRS penalties from mistakes made (an all too common occurrence for small businesses).
This form of outsourcing, like many others, requires that the provider stays on top of legal requirements and has software to transmit data securely.
Human resource outsourcing
These services will handle compliance with government HR audits, handbooks and other requirements. They will also take care of employee relations and can administer employee benefits programs.
With so much to keep up with, outsourcing human relations is one of the best ways to free up a company’s resources for its core mission while giving employee performance better attention.
With software as complicated as it is, digital products that can easily be transmitted and so many good coders spread across the planet, software outsourcing is very popular. See the following advice to avoid some of the mistakes people make in software outsourcing: hiring programmers.
Web design and SEO
As with software outsourcing, web design and search engine optimization are also services that are very suited for outsourcing.
Outsourcing services for everyone
Keep in mind that technology now makes it possible for anyone to outsource from anywhere in the world, and it is not just for businesses outsourcing processes. See Elancer, for more information on hiring Freelancers or go directly to Freelancer and find your outsourcer today.
For larger outsourcing projects
It Match Online is one resource to help larger organizations find the outsourcing services they need.