Outsourcing solution is simply the act of using experts that are not part of your in-house work team to accomplish some of your business processes. In the past, only the big companies could leverage this business solution because of the rigors as well as the cost involved. Thankfully, the coin has overturned to the favor of all, enabling even the small businesses to outsource their business tasks cost-effectively and efficiently.
Types of Outsourcing Solution and Their Applicable Benefits/Concerns
Outsourcing as a business solution is basically grouped into two; offshore outsourcing and on-shore outsourcing.
As the name suggests, the offshore option allows companies to contract out their business processes and tasks to experts outside of the shores of their business location. In essence, these providers could be in Philippines, India or other locations.
Surprisingly, the offshore outsourcing solution is much more popular than the on-shore option. The reasons include benefits such as lower service cost, increased expertise, better performance, faster delivery, and improved productivity.
Some of the concerns that some opposing individuals have about offshore outsourced solution is possible low quality, especially since distance is a barrier in monitoring the providers and their performances closely.
However, if you employ due and rigorous procedure in hiring an offshore outsourcing provider, you will know right away in the course of interview, what quality to expect from the project. So, interviewing a potential outsourcing contractor strictly as you would do when hiring an in-house employee will help eliminate the concern for quality.
This simply means using the services of outsourcing providers in the same country where your business is planted. This is a less-popular option among business owners and companies. The main reason for the less favor on this type of outsourcing solution is increased service charges.
Most on-shore service providers may charge about three times of what an off-shore provider will charge for a service. And, you may not even get commensurate outcome from the high charges. Companies or individuals that leverage on-shore outsourcing often do so to eliminate their concern for possible low quality. This is particularly true in certain aspects such as customer care and call center services. Some clients prefer native speakers to handle these aspects of their business, to ensure that language won’t be a barrier between their representatives and their valued customers.
When to Use Outsourcing Solution
The best time to increasingly consider outsourcing solution is when business expenses, especially expenses coming from operational costs (e.g. overhead items) are racking up heavily and eating deeply into the company’s profit. In this case, a business or company should consider reducing the objects of the costs such as employees and office space.
Finally, when some regular tasks are obstructing the core tasks that guarantee the continuous existence of a business or company, it is best to consider outsourcing solution.
Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.