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Home » Articles » What you need to know about captive services

What you need to know about captive services

What you need to know about captive services

As companies expand globally, they encounter diverse changing markets, cultures, and regulatory standards. Due to this, businesses seek operational models that offer flexibility, scalability, and localization to adapt to these varied environments.

Captive services are among the operational models that have risen as a strategic solution in the ever-changing business environment.

In this article, we’ll delve into the intricacies of captive services and explore their diverse forms. We’ll also highlight the role Sourcefit plays in supporting these endeavors.

Introduction to captive services

Captive services are when a parent company creates separate units to handle specific tasks. These units are fully owned by the parent company and are like extensions.

This setup lets companies customize these services to fit their needs while staying efficient and in control. The parent company ensures these units match its values and strategies, aligning with its goals.

Sourcefit helps companies set up and run these services smoothly. Its skilled team ensures these units work at their best, optimizing their performance.

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Introduction to captive services
Introduction to captive services

Varied forms of captive services

Captive services have five forms, each tailored to cater to distinct operational needs:

Single-function captives

Single-function captive services represent a specialized approach. It channels undivided attention and resources into one area of operation in a business setting.

For instance, consider a scenario where a multinational corporation aims to fortify its customer support division. In this case, the corporation establishes a single-function captive center solely dedicated to customer support operations.

Multi-function captives

Multi-function captive services adopt a broader scope, encompassing diverse operational functions under one consolidated entity.

Unlike their specialized counterparts, this approach fosters synergies across different functions, facilitating holistic control and coordination.

For instance, a multinational corporation might establish a multi-function captive center to manage IT services, finance, human resources, and development functions under one umbrella. 

Shared services centers

Shared captive services are vital hubs in companies, bringing together important support roles like HR, finance, and procurement.

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Centralizing these tasks helps companies work more efficiently and affordably while ensuring each area gets the specific focus it needs.

This setup simplifies work and encourages better teamwork between different departments.

Global in-house centers (GICs)

Global in-house centers (GICs) signify a strategic expansion of a company’s operations onto a global scale.

Established across different countries, these dedicated centers enable companies to tap into diverse talent pools and harness market advantages specific to each location.

Outsourcing subsidiaries

Outsourcing subsidiaries is an essential strategy for companies seeking to balance the benefits of outsourcing with the imperative of retaining control over crucial operations.

Businesses can tap into the advantages of managed captive services offered by service provider while ensuring direct oversight and alignment with their organizational standards.

Captive services that can be outsourced

Sourcefit, a leading provider of outsourcing solutions, offers captive services support  in various domains:

Information technology (IT) services encompass various functions such as: 

  • Software development
  • Network management
  • Cybersecurity
  • Technical support

These functions are critical for modern businesses, but managing them in-house through captive services might not always be the most efficient or cost-effective option.

As such, outsourcing IT services allows companies to leverage the expertise and resources of external providers like Sourcefit. 

Finance and accounting

Although traditionally managed in-house, capture services in finance and accounting can be outsourced to specialized providers for various reasons.

Companies often outsource these functions to:

  • Streamline processes
  • Reduce operational costs
  • Access specialized expertise

Sourcefit plays a crucial role by offering comprehensive solutions tailored to the client’s financial services needs.

The firm’s financial management and accounting expertise allow companies to outsource these functions while ensuring compliance, accuracy, and cost efficiency.

Finance and accounting
Captive services that can be outsourced

Human resources management

Outsourcing captive services related to human resources management presents opportunities for companies to optimize HR functions. Sourcefit offers tailored HR solutions that align with a company’s captive services model.

Research and development

Captive services within research and development can also be outsourced to specialized providers like Sourcefit. 

Outsourcing R&D functions allows companies to access a broader pool of talent, cutting-edge technologies, and diverse perspectives.

Procurement and supply chain management

Outsourcing captive services related to procurement and supply chain management offers companies opportunities to enhance efficiency and flexibility.

Sourcefit integrates outsourced procurement and supply chain services seamlessly into the captive setup.

As a result, firms can navigate global markets precisely and efficiently.

Partner with Sourcefit for your captive services needs

Sourcefit has a proven track record in delivering outsourcing solutions across diverse industries and functions. This premier outsourcing firm ensures efficiency, quality, and cost-effectiveness in managing captive operations.

Now is the perfect time to delegate your captive services to Sourcefit. Visit its official website and book a free consultation with its outsourcing team today!

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About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

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