SUMMARY:

Outsourcing has become a trend to companies almost everywhere. Unfortunately, there have been a lot of misconceptions about the whole outsourcing idea. One is that it is blatantly linked to offshoring and another is that it reduces cost. Part of this misguided information is true enough but there is more to learn about outsourcing then just transferring job functions to low-cost countries and cost reduction.

What is Outsourcing?

Outsourcing is contracting the job functions to another company who will perform the service or produce the product in behalf of the firm. It is considered as a business process term that has been used to denote hiring a consultant, independent contractor, or a free lancer to do a function that the business may not have the time or the expertise to do solely.

It is evident that outsourcing does not only reduce cost but it also allows companies to focus on core functions while the service providers do the non-core activities. The rise of the outsourcing trend has increased the need for companies to better evaluate whether or not a specific business function can be outsourced.  For every business strategy, decisions are always made and risks are intrinsic after decision making. However, these risks can be managed by carefully identifying the specific job function to outsource, choosing the right service provider, ensuring that the outsourcing is managed properly, and making sure that requirements are maintained on a budget.

Organizations need to understand and determine the specific job function to outsource. Service providers have different groups and they are being categorized depending on their job functions.

1. Inbound Customer Service. The concept behind inbound customer service is that the clients call the business’ customer service number and the call will be routed to an outsourcing company. Agents will be available to take the call 24/7 and 7 days a week. Examples of services under this category are billing assistance, product information, and technical support.

2. Outbound telemarketing. Conducting surveys and information gathering for consumer trends are one of the primary goals of outbound telemarketing. Most of the representatives working under this group have a strict schedule that they need to follow.

3. Web design & development. This team designs the site, program the codes, and assist the implementation of company websites.

4. SEO and online marketing. Search Engine Optimization is a necessary tool of the business to promote the company in the World Wide World. The staff that does the SEO should have exemplary English skills create quality articles.

5. Admin support. The most commonly outsourced function is the administrative support because of the easy responsibilities of data entry, word processing, bookings, appointment scheduling, document formatting, and report presentations.

6. Virtual Assistance Services. Most of the staff doing virtual assistance services provide secretarial assistance to the business like word processing, spreadsheet design, internet search, data entry, PowerPoint presentations, and proofreading.

7. Accounting & HR management. This type of outsourcing is more focused on the management of accounts and interpretation, bookkeeping, preparation of annual budgets, monitor the employee performance their training.

8. Marketing and sales support. Because we are talking about the information super hi-way, people from across countries and different time zones will contact the sales support. Service providers should see to it that there are staffs working 24/7.

Things to Consider Before Outsourcing

Before a company can decide whether or not to outsource the specific function to another company, the management needs to talk about it and weigh the pros and cons of outsourcing. But how is outsourcing done?

1. The first thing that should be done by the company is to know what job function is reasonable enough to be outsourced to a service provider.  The first step is very crucial because this is when the management sits down to talk about what process can be outsourced.

2. Perfect timing is also essential in outsourcing because the transferring of job functions requires a timeline for the turnover of loads as well as the migration of the job process.

3. The third step is selecting the right provider. The idea is the same like as if you are hiring an employee for the job vacancy.  It is important that the organization has all the areas evaluated before finally deciding to choose the outsourcing company.

4. Once you have a provider set up to perform the job function, you have to make sure that provider knows and understands about your standards and what they should do to perform quality outputs.

5. The 5^th step is to make outsourcing work. This means that the organization needs to communicate effectively to the outsourcing company to make sure that everything is done accordingly.

6. The organization needs to have a backup plan in the event that the service provider could not deliver.

What to Look For In Your Outsource Provider

Since the outsourcing boom, outsourcing companies have emerged almost everywhere and promising quality service, on time delivery, and cost reduction.  The competition is a good thing because companies will have a number of options to choose from and with a healthy competition, the outsourcing companies will ensure that they have the highest quality at low cost.  In choosing the right service provider that matches the skill requirements that you need, the following areas have to be evaluated.

1. Security. The organization has to consider the security of its business when outsourcing the job function to another company. Some service providers have other background agenda like selling the business secret to a competitor, or getting vital data and using the data for setting up the same business model. It is essential that outsourcing company ensures that they will protect the business’ Intellectual Property Rights (IPR).

2. Workforce. The outsourcing company should have the skilled staff that to meet the job requirements. This is very important especially when the service that they provide requires analysis and judgment.

3. League of expertise. It is important that the organization make sure that the job function is outsourced to another company that is expert in the field. This ensures high quality service.

4. Certifications. There are certifications awarded to outsourcing companies who meet comprehensive operations performance and requirements. It is an advantage for the outsourcing companies to have these certifications to become more competitive in the industry.

5. IT advantage. The service provider should cope with the rising technology trend. Many multinational companies have sophisticated systems thus the reason why outsourcing companies need to upgrade their IT constantly.

6. Financial Background. There should be a solid financial background for the outsourcing company to have a capital to buy the raw materials, hire the skilled staff, and manage the expenses for the activities related to business management.

7. Reviews. Feedbacks from other companies should not be taken for granted because these are first hand reviews from organizations that experienced the service of the outsourcing company.

There are a number of things to consider and learn when it comes to outsourcing. It is essential that the company is well informed with the whole outsourcing concept to make it more effective and efficient.