Business process outsourcing is not just for the big leaguers. Even small businessmen can source out help for functions and projects that may not require full-time employees.
Outsourcing can obtain for businesses, big and small, many competitive advantages.
Outsourcing can offer greater budget flexibility and control. Outsourcing lets organizations pay for only the services they need, when they need them. It also reduces the need to hire and train specialized staff, brings in fresh expertise, and reduces capital and operating expenses.
Outsourcing increases organizational flexibility by elevating he speed of business processes and helping avoid some business bottlenecks. Outsourcing allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded.
Outsourced workers come to you already trained. So, you are technically freed from the hassle of training staff, with the additional advantage of not having the burden of managing them directly.
“These freelancers come on board as subcontractors and save the small business owner the burden of paying overhead associated with payroll taxes and expenses such as health insurance and worker’s compensation, as well as the space constrictions that growing a company in-house can present,” says Nancy Jackson, writing for Entrepreneur magazine.
Outsourcing enables your small company to focus on your core competencies. Contracting specific business processes to third-party service providers will lessen a company’ work load. It thus has more time and opportunity to plan and develop the business.
Probably the most common form of business process outsourcing is in the supply chain sector. A manufacturing company will often hire another firm to manufacture specific parts that will be assembled into a finished product. Yet another company is used to transport these parts from where they are manufactured to where they will be assembled with other parts to produce the finished product.
A number of bureaucratic and repetitive functions can outsourced in order to streamline a company’s operations. Accounting and financial services, including payroll handling, are commonly contracted to an outside firm specializing in these activities. Another function that can be sourced out is human resource services, including recruiting, hiring, and training.
The most well-known outsourced tasks are, of course, information technology services and customer related services such as help desks and contact centers. However, these are mostly for the biggies.. And as everyone knows, these are outsourced by many foreign companies to what are known as call centers located elsewhere. We also know that one of the favorite “off-shore locations” for these foreign companies is the Philippines.
Other functions that may be contracted out are cleaning/housekeeping and security services.
There are however drawbacks to outsourcing. Outsourcing of an Information System, for example, can cause security risks both from a communication and from a privacy perspective.
Loss of managerial control can be another drawback . Your outsourcing company will not be driven by the same standards and mission to which true blue company employees are passionately committed.
There may also be hidden costs involved; anything not covered by the terms of the contract you sign with the outside agency will almost always mean additional costs. Thus, it is advisable to hire a lawyer before signing the dotted line — another cost to contend with!
Photo: from www.uttamabuwala.co
(First published in the Philippine Online Chronicles)