Outsourcing Definition

The doing of business in the contemporary time has taken a new dimension due to the competition that characterised it. Economic activities in our era can be described as economic Darwinism. Only the strong businesses will survive. Besides, the recent global melt down has forced many business owners to look for ways through which they can manage their businesses without spending much money. Outsourcing is one of the strategies employed by most companies in order to manage their companies effectively and to reduce cost. This means by outsourcing, they will spend less in the running of their business and make more profits.

What is Outsourcing?

Outsourcing can be defined as the act through which a company enters into agreement with another so that it will provide them with some services instead of using their own staff to accomplish the task. Many companies today outsource some of the primary operations of their companies. The act of outsourcing is no longer limited to large-scale businesses. Small and medium enterprises are also hiring the services of outsourcing companies to help them in one way or the other. Online businesses today also employ the services of outsourcing companies to help them in the management of their online business and to generic traffic in their website.

What Operations Can Be Outsourced?

Indeed, the act of outsourcing is growing in popularity today. A recent study reveals that a greater percentage of businesses today regardless of the size are hiring the services of outsourcing companies. In other words, any business at all can outsource the operation of their company. A company can contract with an outsourcing company to manage the entire company business for them. This means that the outsourcing company will carry out every function in the company including production and sales of the company’s products. However, some companies outsource only few functions of their company to another. Therefore, what operations to be outsource depends on the outsourcer.

Some of the offices and functions that are mostly outsourced by many companies are the human resource, security, payroll, call centre services, auditing functions, email services, IT works, to mention but a few. In other words, outsourcing companies can carry out any role depending on the agreement with the company hiring their services. However, some outsourcing companies that specialise just in one aspect of a company while there are some can be hired to provide multiple functions to a company.

Benefits of Outsourcing

Though outsourcing may have its disadvantages, the advantages outweigh the disadvantages. The major advantage and the reason why most companies outsource some of their basic operation are to cut cost. Many companies have discovered that it is cheaper for them to run their company by outsourcing some of their operations. Because outsourcing companies do not have overhead expenses and they do not provide any benefits to their staff, they charge their client less amount of money.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.123Employee.com