Outsourcing consists of passing certain work processes from one company to another. In most cases, delegated processes are not core but still strategically important. This means that the company reserves the tasks it copes with within the best manner and, for other tasks, it engages outsourcers who are professionals in their narrow field. For example, a company will need the support of an IT specialist but there will be not enough tasks for a full-time job. Or there appeared a need for security but their services are needed only in emergencies. In such cases, they turn to outsource, signing a contract with a company specializing in this field.
Outsourcing can be categorized on the basis of many different factors each of which has its own characteristics. Below, for example, is the division depending on the tasks transferred from the customer to the outsourcing company:
Some production functions are transferred to a third party
Business processes that are not the company’s main activity are transferred to another company.
The company ensures its own information systems to be operated by another company.
Examples: Technical support, website development, software support, hardware maintenance
By outsourcing certain processes to another company, you will receive the following benefits:
Reduced costs. Your company won’t need to create and maintain an additional department from scratch. At the same time, the cost of services of the outsourcing company is almost always lower than the costs of the company for the stand-alone performance of services. Also, you do not increase the number of your employees which deprives you of taxes on salaries. As a result, you buy only the service itself, without extra costs.
Innovative technologies. The outsourcing company already has all the necessary equipment to get started. At the same time, in order to remain competitive in the market, they constantly update their own knowledge base, retrain personnel, and use the latest technologies.
Minimizing risks. Your company does not experience the risk of business expansion failure. You are not trying to create a new department but getting well-trained professionals. At the same time, if the need for this service disappears, or you find a better solution, you will not need to liquidate part of the business but terminate the contract.
Flexibility. Outsourcing increases the efficiency of decision-making and allows bringing a new product to the market faster while reducing the cost of coordinating processes. Also, in the terms of the contract, it is possible to specify clear conditions for using the service. For example, you will not pay for part of the work if the outsourcing company does not meet a certain KPI.
Getting started immediately. Outsourcing companies are usually obliged to start providing services immediately, after signing the contract, and at a high level. This becomes possible thanks to the presence of special trainers in such companies who communicate with your company in advance, learning all the necessary knowledge about work processes, products, customer support, etc. Thus, they can train their own employees with all the necessary information in a matter of days.
Geography. Big business always strives to stretch not only outside the city but also the country. Expanding to new locations, you will certainly face a number of problems. These can be logistics and delivery issues as well as the language barrier issues. The outsourcing company will already possess an established supply chain, warehouses, and specialists who speak local and foreign languages as well as understand the specifics of communicating with clients in a particular region.
Outsourcing has been tightly integrated into Ukrainian business for a long time. It is actively used not only by market giants but also by small enterprises. Outsourcing changes the very approach to business by taking jobs from employees who have got used to full-time jobs but inevitably develops the economy and a capitalist approach to business. In pursuit of new clients, outsourcing companies are looking for more and more optimal service delivery schemes, hire the fastest-trained personnel, and integrate modern technologies into their work to improve the quality of service.