Outsourcing – A Business Tool
According to Wikipedia, “Outsoucing is the contracting out of an internal business process to a third-party organisation. The term “outsourcing” became popular in the USA near the turn of the 21st century. Outsourcing sometimes involves transferring employees and assets from one firm to another.
Outsourcing can offer greater budget flexibility and control. Outsourcing lets organisations pay for only the services they need, when they need them. It also reduces the need to hire and train specialised staff, brings in fresh engineering expertise, and reduces capital and operating expenses.
The preferential contract rates that can be obtained by temporarily employing experts in specific areas to deliver elements of a project purely online means that there is a growing number of small businesses that operate entirely online using offshore contractors to deliver the work before repackaging it to deliver to the end user.
A common area where this business model thrives is in providing website creation, analysis and marketing services. All elements can be done remotely and delivered digitally, and service providers can leverage the scale and economy of outsourcing to deliver high-value services at reduced end-customer prices.
Companies outsource to avoid certain types of costs. They outsource the non core activities. Among the reasons companies elect to outsource include avoidance of burdensome regulations, high taxes, high energy costs, and other risks that may be prevalent when employing someone full time.
Those companies that have decided to outsource report that it has allowed their company to develop where necessary without the burden of having to take on an unnecessary fulltime salary.
What are your experiences of Outsourcing?