What is Outsourcing?
“Contracting with a vendor to provide a service rather than providing it yourself”
Outsourcing, in literal terms, means sourcing from outside. It is the contracting out of a company's non-core, non-revenue producing activities to specialists.
- Traditional outsourcing : Here the routine jobs or tasks that the staff of the organization does not perform are identified and the service provider usually hires staff for this job.
- Greenfield outsourcing : Without hiring the service provider the organization can directly hire an imminent company which can execute their business which was not done in the organization internally.
- Information Technology (IT) Outsourcing
- Web site development
- Software development
- Network backbone services
- IT remote support
- Business Process Outsourcing (BPO)
- Call centers
- Finance functions and activities
- Book keeping services
- Human resources
- CAD service
For an organization the decision to outsource can be brought about by a number of factors:
- Heavy workload
- Lack of time or urgency
- Lack of expertise
- Deplorable cost to perform services
- Shift to new technologies and/or existing technologies
- Add to existing staffing levels hastily
- Focus on operational, functional, or technical limitations
- Return the focus of staff to core capabilities
- Hasten benefits by rapidly employing services or projects
- Trim down costs in an explicit functional area
- Increase service levels
- Reduce capital costs
- Cut recurring operational costs
- Enable business tactics and/or transformations