What is Outsourcing? Definition of Outsourcing

Outsourcing what is it definition
Outsourcing what is it definition

Outsourcing services is a process increasingly common in all types of businesses and even large business organizations. Putting the responsibilities of certain tasks on people outside the company allows specialist professionals to dedicate themselves to them, which increases the chances that they will be carried out successfully. In addition, it offers many other advantages for the entrepreneur, such as saving money invested. All of this ends up having a positive impact on business management.

Definition of outsourcing?

Outsourcing is the subcontracting of services to third parties to carry out complementary or specific activities to the main axis of the business. This implies outsourcing of specific tasks on which the company lacks resources to carry them out with guarantees of efficiency and success.

It must be taken into account that this process also entails the need to trust other organizations, to comply with some of the basic factors of the service that a company wants to provide to customers. Therefore, it is essential to demand all the essential guarantees so that they can ensure the quality of their service.

Likewise, in the definition of business outsourcing of services it is important to emphasize that it should never imply the outsourcing of tasks essential for the development of the business.

Consequently, before deciding to start an outsourcing process, it is essential to analyze the areas whose coverage will be most necessary for the correct development of the company and to be able to fight with the best possible weapons against the competition. It will also be necessary to take into account the costs, the limits to be established and the experience and background of the firm to be hired.

In the same vein, it is recommended to analyze the experience of other companies in the sector, to see if the competition is really opting for this figure when developing certain aspects of their work. If no one outsources the work, you can think of a proven lack of efficiency when ordering certain services or, on the contrary, consider that it is a unique opportunity to make a difference in the sector.

Finally, when defining outsourcing, one must not forget the legal aspect of entrusting the work to an external supplier. Taking care that the responsibility and responsibilities of each company are made especially clear is the only way to avoid legal problems during the relationship between the two.

Types of subcontracting services

Although at first it can be said that any task is susceptible to being outsourced in a company, it is true that there are some services that are more commonly outsourced. Among them, we must not forget:

  • The attention to the client. Since it is an activity that requires a lot of space and cost. To carry it out with guarantees of efficiency, it is necessary to have the personnel, computer systems, telephone equipment and work cubicles for each employee
  • Human resources. Hiring the right professional for a job involves the involvement of human resource specialists, psychologists, and other professionals. Considering that hiring is not a permanent action, it is much more efficient to use an external provider for this service.
  • Cleaning service. In order to have a flexible team that adapts to the specific needs of a constantly evolving space.
  • Marketing campaigns. Having a digital marketing agency and being able to delegate campaign management to its professionals is an essential requirement to be able to optimize them and ensure a good presence on social networks.

Objectives of outsourcing

In essence, the main objective that a company has when deciding to outsource some of its services and outsource them to a provider is to improve the general operation of the business. Anyway, this concept can be expanded on specific subgoals:

  • Reduce company expenses.
  • Being able to evolve as a business.
  • Save money to be able to invest in specific aspects in which the company lacks.
  • Access resources that are not available and whose achievement represents a problem.
  • Improve the service offered to the client and, therefore, achieve their loyalty by solving their needs.
  • To be a more flexible company, with the ability to adapt to changes that may occur, both externally and internally.
  • Being able to focus on developing the most important aspects of the business.
  • Solve the ignorance of the know-how of certain actions that the company must carry out, and that are not directly related to the main axis of the business activity

Advantages of outsourcing

If an entrepreneur opts for outsourcing as a management tool for some of his business tasks, he can enjoy several advantages. Among them, the following stand out:

– Budget control

By placing certain tasks on external companies, it is not necessary to invest in the creation of new infrastructures or the purchase of specific technology. Nor is it necessary to hire workers to carry out this work. If you only need to pay for the service performed, you can save a significant amount of money. Likewise, it must be taken into account that the outsourcing payment becomes a fixed cost, which can be anticipated. This clearly benefits the company’s overall budget.

– The dispersion of tasks is avoided

Similarly, the secondary service outsourcing process allows the company to focus uniquely on its core business. Therefore, it does not consume other resources, which can be applied to strategic actions. In this way, greater business performance is achieved.

– Less risks for the company

Hiring external suppliers specialized in certain tasks means that the company does not assume certain risks in key sectors of its production. Likewise, you do not have to allocate resources to new projects, which can represent important initial investments, with the consequent danger that they will not bear the expected results.

– A quality work

Within a company many actions are carried out that are, in reality, very complex processes. In addition, they are key for the business to give the expected results. If you choose to assign its realization to professionals with proven knowledge and experience in this field, it is guaranteed that you will obtain products of the highest possible quality.

– Productivity improvement

Not having to make any decisions or having to select personnel or take any other action makes the execution of a job much faster and more efficient. If the same production is achieved in less time and with the investment strictly necessary to pay the external service provider, the productivity of the company increases. And, therefore, its long-term financial benefits.

– Increases the competitiveness of the company

Another of the great advantages of outsourcing is that it frees the company from carrying out secondary tasks. Consequently, you do not need to invest more time or resources than is strictly necessary in the projects you already have. This allows you to focus your work and your resources to improve innovation within the business and, in addition, to launch new projects. Of course, this is an essential element for the business to be more competitive and to be able to position itself well in the market of its sector.

– Business flexibility

If more specific tasks are outsourced to a specialized supplier – with the most innovative knowledge and technology – the company has a much better chance of adapting seamlessly to any changes in the market.

– Seasonal work

In the same way, subcontracting is very advantageous for those companies that carry out seasonal operations  and for which specific human and technical resources are required. Having an external supplier for them, who will only be paid for the work done, allows a significant saving of money.

– Administrative tasks

Not having to include outsourced services in the management of the business offers the advantage that those responsible for the company see the management of the entire administrative part much more streamlined.

– Talent empowerment

Companies that decide to outsource some of their services do not have to worry as much about all the tasks involved in their work. Therefore, they can dedicate themselves entirely to the empowerment of human talent.

In short, it can be said that the figure of subcontracting or outsourcing services makes the company have a beneficial position in the market. The reduction of costs, the professional specialization of the hired experts and the possibility of having the highest level technology are three essential factors to help improve the results of the company and its positioning before the competition.

In an increasingly competitive and demanding market, outsourcing should be considered as one of the essential tools to improve the results of a company, both economically and productivity. This is the main reason why businesses increasingly opt for this element when it comes to work.