|
| Home >
Offshore Outsourcing > Why Outsourcing?
|
|
|
|
|
|
|
Business sense of Outsourcing
|
|
Outsourcing allows organizations to form strategic partnerships that focus on core competencies, thereby reducing corporate costs and increasing productivity. The centralized buying power of these BPO service providers, coupled with the fact that they represent a major new low-cost channel of distribution, can create a unified block of purchasing strength.
Today, more and more organizations seek outsourcing as a more effective means to a more profitable end. With competition pressures reaching new heights and failing business more expectation than a fear, companies seek other sources outside the customary organization and hierarchical lines for solutions to business problems. And, if these potential contracted sources are pursued rightly, with the right goals and tasks in mind, these partnerships can mean the difference between success and failure for many businesses.
There is no doubt that outsourcing can introduce creative thinking and the potential to get a fresh look or gain new perspective for old or existing problems. Outsourcing also gives the advantage of bringing in qualified people into an organization without having to hire them as full-time employees. And, most importantly, outsourcing certain jobs can save time, money and energy. Deadlines can be met. Projects can be completed. Labor costs can be kept down because you can hire on an as-needed basis.
Does outsourcing make a business sense? Let’s analyze this statement in light of more facts and figures and come up to a feasible workable solution. |
|
Top Strategic Reasons for Outsourcing
|
|
Outsourcing is now a hot selling concept in the market. The key to this dramatic shift is the need to stay ahead in this highly competitive scenario. Leading companies worldwide realize the need to reduce costs, provide the best quality, use the latest high-tech skills, and be reliable and innovative at the same time. All these services and needs can be fulfilled only with the singular alternative of outsourcing.
|
 |
To Improve Business Focus |
| |
Outsourcing allows companies to focus on broader business issues allowing operational details to be handled by an outside expert. For most of the companies, the single most compelling reason for outsourcing is that several non-core issues are siphoning off huge amounts of resources and attention from management.
|
|
Gain Access To World Class Capabilities |
| |
By the very nature of their specialization, outsourcing providers bring extensive world- class resources for meeting the needs of their customers. Partnering with an organization with world-class capabilities can offer access to new technology, tools and techniques that the organization may not currently possess; more structured methodologies, procedures and documentation; and a competitive advantage through expanded skills.
|
|
Accelerate Re-engineering Benefits |
| |
Outsourcing is often a by-product of another powerful management tool; business process reengineering. It allows an organization to instantly realize the estimated benefits of reengineering by having an outside organization one that is already reengineered to world-class standards/process.
|
|
Sharing Risks |
| |
There are tremendous risks associated with the investments made by an organization in information technology. When companies outsource they become more flexible, more dynamic and prepare themselves to meet the challenges by sharing risks.
|
|
Redirect Resources To More Strategic Activities |
| |
Every organization has limited reserve of resources. Outsourcing permits the redirection of resources from non-core activities to more central activities that accelerate the return on investment as well as help serving customers in a better way.
|
|
One Time Applications |
| |
Applications that need to be developed or modified for a specified time require high manpower resources at one point of time. This needs the organization to revamp the application in a relatively short notice. This in-turn is expensive. For this, outsourcing turns to be the best solution. For e.g. Y2k, Euro, porting from one-platform to another etc.
|
|
Reduce Or Control Operating Cost |
| |
The single most important tactical reason for outsourcing is to reduce or control operating costs. Access to an outside provider's lower cost structure is one of the most compelling short-term benefits of outsourcing. In a recent outsourcing Institute survey, companies reported that on average they saw a 9% reduction in costs through outsourcing.
|
|
Make Capital Funds Available |
| |
Outsourcing reduces the need to invest capital funds in non-core business functions. This makes capital funds more available for core areas. Outsourcing can also improve certain financial measurements by eliminating the need to show return on equity from capital investments in non-core areas.
|
|
Generate A Cash Infusion |
| |
Outsourcing can involve the transfer of assets from the customer to the provider. Equipment, facilities, vehicles and licenses used in current operations all have a value and are, in effect, sold to the provider as part of the transaction, resulting in a cash infusion.
|
|
Unavailability of Secure Resources Internally |
| |
Companies outsource because they do not have access to the required resources within the organization. For example, if an organization is expanding its operations, especially into a new geography, outsourcing is a viable and important alternative to building the needed capabilities from the ground up.
|
| |
|
 back to top
|
|
|
|
|
|
 |
 |
| |
|
|
|
|
Checklist for deciding the jobs to be outsourced
|
|
First, look at your own organization’s operation. What is the most difficult, time-consuming or expensive job performed? Can you bring someone from outside to do the job better, in less time or for fewer costs? Consider cost, paperwork, and efficiency benefits and use outsourcing to hire temporary employees, topic experts or consultants to do the job more effectively, more efficiently, and on time. Consider the savings in dollars as well as in time if you hire someone else to do the work. It is very likely that you can get more for your money with outsourcing.
|
 |
Does your company struggle to meet deadlines or complete projects? Consider hiring an outside expert or project manager to direct those deadlines or projects. |
| |
|
|
Can your organization make qualified decisions in a constantly changing technological environment? Consider hiring an outside technology consultant who has to keep up with the technology to stay in business. |
| |
|
|
Will you be able to effectively manage costs, time and energy while maintaining profitability? Consider building an alliance with an outsource associate to get the job done better, more productively, more resourcefully. |
|
| |
| |
back to top |
|
|
|
| |
|
|
|
