Many blue chip and small companies use outsourcing as this gives more savings on the company’s capital by looking for employees from other sources. Many corporations downsized because of the financial crisis right now.
But you may ask, what really is outsourcing? It is the method of management transfer and the everyday implementation of the roles to an external service provider. The company and the said service provider will have an agreement that is sealed by a contract. Production means is provided by the client company in the form of assets, resources and of course, manpower.
The normal functions that are outsourced by big or small companies are accounting, human resources, customer support and the IT or the information technology. Even ghostwriting, telemarketing, web development and drafting using CAD are even outsourced.
The Question of Outsourcing. Any corporation has an option of doing the outsourcing as a specific function or by just doing it using the in-house employees and the available resources. Deciding to outsource is such a major decision approved by the board, usually done at a strategic level. This outsourcing leads to the function of supply chain by using a third party.
The firm first selects the particular activity to be outsourced and then gives a justifiable reason for the choice. If the function to be outsourced is approved, the search will thus begin looking for the best outsourcing partner.
Advantages of Outsourcing. Communication is reliable and is enhanced nowadays by the usage of the internet, as superiors may easily use some methods and tools that are available online. Companies may also make use of online conferences. Some technological gadgets are available at the moment that will be able to help the superiors to be in touch with the different outsourced workers regardless of the difference in time and location.
Owners of the business will be able to save more time and money and will be able to conserve the effort in directing the sales and other such business transactions. Salary of the outsourced person may also be adjusted according to the wage standards of the location of the worker. Willing workers are easy to find with the comfortable salary wages offered enabling these workers to work more efficiently and more satisfied as well.
The Risks of Outsourcing. The global financial crisis at present affects everyone most especially those in the first world countries like the United States. Of course, the companies will outsource from countries which do not require high pay checks. This provides such a disadvantage for the company of not properly monitoring the employees in their activities due to their location. Evaluation of the potential workers are limited as the superiors may only conduct the interviews and short tests, if there is, to check and determine the workers’ efficiency.
Avoid the Traps. In the outsourcing set-up, dishonesty is possible to occur as the management is not hands-on. The way the business will be conducted over thousands of miles is risky, as a sole dishonest manager may possibly control the other workers in a certain division in a dishonest way.
The owners of the business should be hands-on regarding the financial status of the company and should be more careful to prevent losses to occur. Of course, losses in some cases may be unavoidable. And if you will be able to save costs in manpower and labor, additional expenses need to be rendered for check and maintenance.
Each business and company needs to check and review the advantages and disadvantages of outsourcing first and foremost before making the decision on a particular function of outsourcing. The decision may be able to lead to a better outcome and lower the expenses of the company if everything is done correctly or otherwise.
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