How to Use Outsourcing Effectively


Outsourcing, it is the most common word used in today’s IT world. And a common man still wonder what does the word actually mean and why is it so popular these days?

Here we can see about it. Outsourcing is a contracting with third person or with another company for doing a particular work. The work which is being outsources is considered to be non-core to the business. And in recent years, almost every business organization or company outsources in one or another way.

Consider an insurance company, it outsource its landscaping and other similar operations to organizations that specialize in those types of work and as since they are not related to insurance or strategic to the business. Here a term called “service provider” is about to born. They are those third party providers who are outside organization that are providing the outsourcing services.

As long as work specialization exists, outsourcing will also exist. Outsourcing is mainly done to complete the work efficiently, to do within the time and it is also cost effective. Many narrow functions such as payroll, billing, data entry, and content writings are being outsourced by companies and they employ the outsourcing model to do it.

In current years, outsourcing takes several forms. Service providers are still hired by some organizations to handle particular business process as like benefits management. But mostly many organizations outsource the whole operation. BPO and ITO there are the areas where lot of job opportunities available in current IT world, isn’t so? Of course, Business process outsourcing is shortly called as BPO as like information technology outsourcing calling itself as ITO. And these are the most common forms of outsourcing.

Finance and accounting outsourcing, human resources outsourcing and claims processing outsourcing, call centre outsourcing are those which dealt in business process outsourcing. These are always multi-year contracts and it runs into hundreds of millions of dollars. And most well known outsourcing service provides in ITO and BPO fields are HP, Accenture, CSC, IBM, etc.,

The success of outsourcing depends on mainly three factors:

  • Client’s ability to manage its service providers
  • Executive-level support in the client organization for the outsourcing mission
  • Generous communication to affected employees

Four stages of outsourcing process:

  • Strategic thinking
  • Evaluation and selection
  • Contract development
  • Outsourcing management

And outsourcing has to face lot of challenges. One of the greatest challenges is when the work is being done in a different country it will involve language, cultural and time zone differences and it should be managed to its fullest.

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About the Author: Marie Mayle is a contributor to the MegaHowTo team, writer, and entrepreneur based in California USA. She holds a degree in Business Administration. She loves to write about business and finance issues and how to tackle them.

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