Benefits of outsourcing

Outsourcing

Before starting to explain about “Outsourcing I would like to define what is outsourcing, “outsourcing basically means sourcing from outside” It is sub- contracting of different function, procedures, services given from one company or organization to some other company or organization. Outsourcing is one kind of contract in which the services are provided by one company to another company. Company buys product & processes from the outsider inspite of processing it in house. These companies can perform all these services by there own also but due to many different reasons the process of outsourcing is carried out by the companies. The main & very important reason of outsourcing is the great amount of JOBS.

Outsourcing = Sub-contracting

Work completed for an organization & firm by a person but other than the companies human resources

Beginning of Outsourcing!!!!!!!!

In the history of outsourcing various “Developed” countries was trapped in the grip of slow-moving economic growth in together with unemployment & inflation. The price is just increasing high & high. To obtain solution and to get out from this situation the interest rates has been increased nearly 18%-20% in order the high increase in this would slow down the inflation. This technique worked. But in due course of time a rigorous recession followed, causing a side effect of with high interest rate the huge increase in the values of dollars. Investors anxiously start purchasing Government bonds. Because of these the foreign industries found themselves in difficulty.

Due to all such reasons, they started to made transfer of jobs overseas. The negotiation was successfully completed with agreement considered as sub- contracting. In the late 90’s the process of outsourcing was really doing so much well with the entire economical growth environment under control. “By operating locally we can work globally”
Outsourcing is not current happening and therefore the system of outsourcing took years to get rooted deeply. This is for the reason of outsourcing only the framework of our global and local system developed resulting in victory. The opportunities for developing & hardworking countries for protecting the highly skilled career to developed countries.

BENEFITS OF OUTSOURCING


Awareness on core business areas

Due to outsourcing the awareness of n- number of belongings has been increased tremendous. Awareness regarding the upgrading technology, growth in businesses, jobs and many more things. Awareness of challenge & opportunities for youngest in businesses.

Outstanding technology at lower rates

Outsourcing plays a dual role hand in hand, as the technology is developing day by day with increase in more amounts of business results in more number of outsourcing work. Because of this everyone become skilled at lower rates getting an outstanding technology updates

Expert manpower at inexpensive prices

Actually it is a fact that the developed countries provide the work of outsourcing to the developing countries because they get the expert manpower at inexpensive cost.

Increased efficiency

In Good organization non- core business task will be performed efficiently by outsourcing partner, while carrying out the core business function which is very important from the prospect of business are carried out in house only. Hence definitely this will going to results in achieving the double efficiency.

Competitive advantage

Outsourcing helps your firm to stand confidently in a competitive environment of market. You can right of entry to focused services for various different business processes and therefore provide your customers with what the best of your services. All such strategies of business will give your organization an exact benefits & profits.

Tariff benefits

The outsourcing also helps to reduce the tax& tariff benefits.


SOME DEMERITS

Decreased quality

The quality of work sometimes decreases, this may be because of psychological factor. Because the human being is doing the work and we cannot predict the human psychology. If they will feel that they are not basically working for there own company but working for some others then sometimes it may happen that the quality of work may get hamper.

Poorer customer service

Sometime because of operating and providing various services to customer,Company try to expand them more & more and which will results in poor customer services. Also as the company outsourcing there work to others the requirements of customer remains unfulfilled. Due to lack of information & knowledge regarding the operations

Loss of control

Due to outsourcing the core function of organization are transfer to other is one of the reasons of losing the control over business. So to avoid all this and to retain the control the organization should perform the core business and outsource the non-core function. Similarly don’t treat the outsourcing companies as vendor but treat them as Partner.

Risky Dependency

As soon as the company starts outsourcing they rate of dependency increases and there the risk that the tradition institution will become too addicted on that outsourcing agency. As many of the function of a heritage organization are core and important but due to the outsourcing the dependency of all the core functions will goes on increasing

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