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Understanding the outsourcing world

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Outsourcing is the latest trend in the business world. With the help of advanced technology, companies can easily hire and manage personnel around the world, let them work remotely, and mainly focus on the business core of the company.

How outsourcing works

Generally speaking, outsourcing works when a company delegates its in-house tasks and responsibilities to a third party. This third-party agency then allocates workers and employees to their accounts—supervisors, team managers, agents, and everything in between. In turn, the client will pay for the billed seats and nothing more, depending on the contract.

For the parent company, this means that they will no longer be handling those extra expenses that come with acquiring extra employees.

How outsourcing works
How outsourcing works

Definition of outsourcing

Outsourcing is the practice of handing over of services to a third-party enterprise. It may include both foreign and domestic contracting, and it may include offshoring (relocating a business function to a distant country) or nearshoring (transferring a business process to a nearby country).

Outsourcing or subcontracting, in a simple context, is mainly transferring the operations, jobs, or processes outside the company premises.

Advantages of outsourcing

  • SAVING COST. This is one of the major factors why businesses used outsourcing. As the outsourced workers are mostly from third-world countries, they are lot cheaper than their first-world counterparts.
  • FLEXIBILITY IN STAFFING AND MANPOWER MANAGEMENT.  With outsourcing, you can directly hire staff within an hour while conventional hiring staff will take at least a week to hire the best candidate.
  • MORE FOCUS ON YOUR CORE BUSINESS.  What every business wants is to focus on how to flourish their business and outsourcing can take care of the operations and personnel management.
  • COMPETITIVE SKILLED WORKER. Businesses can choose skilled workers and experts readily available.
  • INFRASTRUCTURE. Since outsourced personnel works remotely in other places, there’s no need for company expansion to accommodate them.
  • FASTER AND BETTER SERVICE. If any business, needs a job to be done within a short period of time, outsourcing provides faster and better service.

Disadvantage of outsourcing

  • LOST OF CONFIDENTIAL DATA AND BUSINESS SECURITY. As you transfer the operations to a third party, all business confidential data can be passed too. To avoid loss of data and business security, it is always a good option to have NDA (Non-disclosure agreement) or a confidentiality agreement.
  • DELAYS OF WORK.  It is one of the major setbacks of outsourcing. If the work is not done within a specific time, it will greatly affect overall operation.
  • BUSINESS CONTROL. Since outsourced personnel is a third party, you don’t have full control over your business whether it’s personnel management or any uncontrollable situation.

Commonly outsourced roles

IT sourcing

The IT outsourcing sector provides world-class tech services to global companies of all sizes.

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Did you know: India holds the title of the world’s IT outsourcing capital according to multiple sources. With the country’s labor force and costs, it’s no surprise that most foreign investors would choose to establish their companies there.

  • IT helpdesk
  • Software developers
  • Backend programmers
  • Game developers
  • IT managers and consultants.

Recruitment

The recruitment process outsourcing, mostly known as the RPO sector, is another branch of outsourcing. With this, companies outsource their hiring efforts to third-parting hiring agencies. 

Did you know: RPO companies handle multiple client accounts and full-cycle recruitment for others. They also deal with hiring surges on both ends—including their own staff and for their clients.

  • Recruiters
  • Resume sources researchers 
  • Background checks assistants
  • Admin and clerical administrators
Commonly outsourced roles
Commonly outsourced roles

Customer support

One of the busiest divisions of every outsourcing campaign, the customer support subsector is undoubtedly the biggest aggregator of roles and responsibilities. Most BPO employees and call center agents start as customer service specialists.

  • Inbound and outbound campaign managers 
  • Call center agents 
  • Reservation specialists
  • Data officers
  • Chat and tech support technicians.

Content creation

Content creation is arguably one of the most important aspects of any company out there. It’s not a surprise that most choose to engage in hiring freelancers and independent contractors when it comes to small projects.

  • Writers
  • Graphic designers and artists
  • Project managers
  • Content associates and managers
  • Editors
  • Animators

Web design and development

Nowadays, websites are considered as a brand’s first impression to their audience. Most businesses are clamoring to have a user-friendly, organized, and aesthetically pleasing website.

These sites must hold all the information pertinent to a company, such as their products, services, their rates, contact information, and more.

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  • Frontend developers
  • Web designers
  • Web developers
  • Project liaisons
  • Web administrators

Legal sourcing

These processes can be a tedious setup for legal firms. Most names in the business may choose to outsource their tasks, roles, and responsibilities to LPO agencies.

Legal process outsourcing trains degree holders, experts, and professionals to execute these tasks in a timely manner.

  • Transcriptionists 
  • Paralegals
  • Corporate lawyers
  • Legal assistants

 

 

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO)

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between Philippines outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

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.