Outsourcing in literal sense means sourcing from offshore business houses. It refers to sub- contracting of non core aspects of the business to a third party vendor. It can also be said that, outsourcing is a sort of arrangement in which one company hires another company which can take charge of their in-house services. Outsourcing can range from large contracts like managing the IT support services of the client, to the general trend of hiring contractors and office workers on individual basis. Generally, the non-core aspects of the business are outsourced.
Some common examples of outsourcing include IT support services, telemarketing services, manufacturing components, order processing, phone answering services and customer support services.
Types of outsourcing:
Outsourcing can be divided into two broad categories. These are Business process outsourcing( BPO) and Knowledge Process Outsourcing (KPO)
Business process outsourcing (BPO): This term was coined in the year 1995 and was accelerated by the expansion of Internet business. It is the process of hiring a service provider which would handle the business activities of the client company.
These are some of the common BPO services which are outsourced: Back office functions, IT help desk services, Accounting services, Human resource services, Customer support services, Telemarketing, Database management, Web development, Content writing, Market research, Manufacturing and many others.
Knowledge Process Outsourcing (KPO): This is also known as technology outsourcing services. This can be defined as a high value added process chain which depends on factors like skills, experience and domain knowledge. Generally KPO is carried out by people who have certain expertise in that particular area.
KPO typically involves the component of Business process outsourcing (KPO), Analysis process outsourcing (APO) and Research process outsourcing (RPO)
Some of the common KPO services are : Animation ans simulation services, Intellectual property research,Business and technical analysis, Litigation services, Research and development, Learning solutions, Medical services, Data analytics, Network management, Software development and many others.
Benefits of outsourcing:
Some of the benefits gained through outsourcing are as follows:
*It provides opportunities to focus on core business operations
*Helps to reduce human resource management costs.
*Provides access to specialized resources as per requirement
*Organized project management, refinement of risk management and service delivery abilities
*Better implementation of demand management and support operations
*Efficiency in process management and service deliveries
*Improved customer satisfaction which helps in customer retention.
*Advantages of time zones. This enables the client to work faster and gives a competitive edge to his business.
Today, outsourcing market is seen to be one of the strategic management option, rather than just a mere cost cutting operation. It is estimated to grow in near future, as increasing number of companies are planning to outsource their high as well as low end jobs to offshore destinations. It helps offshore companies to have cutting-edge in their business worldwide.
Sandra Jones works with a reputed BPO service provider in North America. She has written various articles on outsourcing, call centers, telemarketing services and industry related to BPO service providers. Her area of expertise lies in Business process outsourcing.
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