Outsourcing is a process where a company passes over the responsibility of planning an activity or project that is or could be done internally to another company. Outsourcing is a practice many companies deploy to get top candidates without getting involved in the process of sourcing and selecting.
Companies that opt for outsourcing rely on third-party providers’ expertise in carrying out the outsourced tasks to gain such benefits. The principle behind this is that since the third-party provider focuses on that particular task, they are most likely to do it better, faster, and more cost-effectively than the hiring company could.
Broadly there are several distinct forms of outsourcing, depending on the process, one may be preferable over another. However, the four major types of outsourcing Include:
Faster services: outsourcing helps you get your ideas converted into products better and faster. It cuts down on time wasted in onboarding new employees.
As much as outsourcing is a useful tried-and-tested model for profitable business operations, this reason alone isn’t enough to implement a successful outsourcing program. Organisations must ensure that they consider the upcoming issues beforehand. Some of the challenges associated with outsourcing include:
There is no one right approach to outsourcing. Just as companies differ from one another, so also are outsourcing strategies. However, the following best practice has proven itself in many situations:
A contract between an outsourcing service provider and a client is referred to as a service level agreement (SLA). It states, usually in measurable terms, what services the vendor will provide. At the beginning of any outsourcing relationship, service levels are determined. They are used to measure and monitor the service provider’s performance.