Not so long ago in public transport I became an involuntary listener of the conversation between two young people.
One of them turned out to be a businessman and enthusiastically told about his own business, using different, sometimes incomprehensible to me terms.
I think that his interlocutor understood not all, because he periodically asked questions.
One of the questions was: "And what is the outsourcing of ?".
The next stop was mine, so I did not hear the answer to such an interesting question.
When I got home, I decided to refill my knowledge in modern business terminology and got on the Internet for information.
And having learned that the word "outsourcing" hides a very useful practice for entrepreneurs, which has long been successfully used throughout the world, I decided that my readers will also need this information.
What is outsourcing and how does it differ from conventional contracts?
The very word "outsourcing" was formed from three English lexemes "outer", "source" and "using", so its translation with the help of one Russian word is impossible.
The most popular answer to the question " What is outsourcing?" Is: "Using an external source for your own business".
Simply put, you need certain services, use the resources of another company, but not once, but on a regular basis.
Actually, it is this that outsourcing differs from subcontracting or periodically seeking help from another company.
As a business owner, you enter into a long contract( usually at least a year) with a contractor who will provide regular services to you.
These services can have any direction: transport, computers, analytics, finance, real estate, etc.
In its turn, the contractor adjusts its capacities to your requirements, because after signing the contract you become its main client.
You work with your contractor not only from order to order, but also at intermediate stages.
So tight cooperation allows you to compensate for the lack of capacity of the entrepreneur and, accordingly, helps to improve the process and increase profits.
Outsourcing abroad has been used for a long time.
He enjoys special popularity with the world leader in implementing business innovations: the USA.
Already in the 90's a lot of American companies used this practice to optimize their own activity as much as possible. This fact is confirmed by the annual research of specialists of the profile institute.
For example, if you take the distant 1995 year, research shows that even then about 20% of American firms used outsourcing to get help in accounting operations, and about 80% - in management.
Kaizen - do not stop improving
Not much behind in terms of using outsourcing from the US and Europe.
Unfortunately, domestic entrepreneurs do not often use outsourcing, preferring to be satisfied with one-off contracts or inflating their own staff from a multitude of specialists whose services are needed only from time to time.
This, of course, negatively affects the company's budget.
Outsourcing: What Kinds Does It Happen?
It is difficult to choose one single classification of outsourcing, because its division into species depends on many factors: the company profile and the specifics of the contractor, the goals set by the customer to the contractor, the type of ownership and much more.
The simplest, most understandable and popular business classification of outsourcing is to divide it into two types:
- Intelligent outsourcing of is the transfer to the contractor of functions that have an intellectual component and are directly related to business processes: personnel management, accounting audit, legal consulting, research, advertising company of the product or services provided, assistance to programmers and designers when creating websites and muchother.
- Industrial outsourcing - assistance directly in the production process: manufacturing of some components, loading and transportation of finished products, maintenance of equipment at the factory, repair of it as necessary, maintenance of computer equipment in offices, maintenance of cleanliness in the premises and much more.
Most often, company executives resort to outsourcing in order to increase the mobility of their own business and create the most effective communication environment for it.
That is why contracts guaranteeing long-term cooperation on a regular basis are mainly concluded with contractors who provide computer, transportation services and communication services.
Advantages and disadvantages of outsourcing
Domestic entrepreneurs do not so often use outsourcing in their activities, because they do not know about all its advantages.
The main advantages of this practice, according to experts and businessmen themselves, are as follows:
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Saves time for the head of the company, which he must spend on the distribution and control of the servicing functions.
So, he will have more time and energy left to expand his own business.
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It's no secret that any company, regardless of its size, has difficulties with the staffing.
If you cooperate with a contractor who manages the staff, stop worrying about who will replace the regular staff at the time of their vacations, about raising their qualifications, etc.
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Reducing costs, because you do not need to keep more employees( eg, computer specialists, lawyers, personnel officers, etc.) and pay them monthly.
Their functions will now be performed by the contractor.
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The opportunity to benefit from the extensive experience and high-quality resources of a company with a narrow specialization.
Typically, companies that provide outsourcing services, keep only highly qualified specialists in their staff.
- Shift responsibility on the shoulders of your contractor and the possibility of receiving cash compensation, if he will make mistakes.
Despite a number of advantages, outsourcing has one very serious drawback: the dedication of another company to its commercial and production processes.
You will never know if your contractor is cooperating with your direct competitors and is not trying to harm your business by their tip.
I recommend to view the informative
video about IT outsourcing and the reasons for its use:
Now you know, what is outsourcing, and you can use it for your business.
If you choose the right contractor, then you will not have to worry about preserving the trade secret.