Outsourcing is the transfer of services of a company to a third party, which is subcontracting a service, such as product design or manufacturing or product design to a third-party company. The decision whether to outsource or to do inhouse is often based upon achieving a lower production cost, making better use of available resources, focusing energy on the core competencies of a particular business, or just making more efficient use of labor, capital, information technology or land resources.
Information Technology outsourcing and business process outsourcing are the two common types of outsourcing in which BPO includes outsourcing related to accounting, human resources, benefits, payroll, and finance functions and activities. KPO (Knowledge Process outsourcing) includes outsourcing related to Paralegal, legal, and other highly skilled activities.
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How to Outsource Successfully
Deciding to outsource some tasks instead of doing them yourself is a very important step, but to be successful you have to know how to outsource successfully. This means that you must be able to find someone that can provide the service you need with high quality, in a timely manner, at affordable price, and at the same time protect yourself from losing money.
- Understand your business and its processes and have a strong grounding in technology.
- Have a high quality service level and competitive cost-structure.
- Be a stable partner for the long term, with client value creation as the sole objective.
- Keep pace with you and grow, and be flexible to meet your ever-changing requirements and expectations.
- Have proficiency and experience in managing business processes with a strong technology background.
- Provide service without high distraction risks.
- Provide faultless interface with your enterprise.
- Provide world class "confidentiality/safety practices.
- Have an outsourcing methodology that will render discontinuity easy and quick.