Businessess has resorted to outsourcing by contracting their business with a third party.
The main reason for outsourcing is because of the financial savings due to lower international labor rates as oppose to hiring locally.
There are different types of outsourcing services. Primarily these fall into two types of outsourcing: technology services and business process outsourcing.
Each of these services has grown popular because companies want to reduce their operational cost.
The company will be able to save on equipment and labor cost. However, if there are advantages of using these services there are also some risks involved as well.
These types of outsourcing like technology services deals with organizations that offer sophisticated computers, servers and software.
Technology services are further divided into sub-categories like network infrastructure, eCommerce, software development, web hosting and development.
These types of outsourcing services play a great role in the business operations. Business Process Outsourcing also involves not just hiring another company to take care of the other services of the company but to can also include front end services like customer care or technical support for instance.
By the way outsourcing can be local or global.
The trend veers towards global BPO.
Customer phone support is one of the well known types of tasks. This side of the company operations is delegated to a call center from another country that offers cheaper labor.
These does not come with its set of challenges like some horror stories of how they were handled by customer representatives that speak broken English that they cannot comprehend. Accounting professionals from around the world follow a standardized method of accounting practices.
It makes it easier for the outside work force to take care of book keeping tasks. The same thing can be said about preparing tax returns.
Some industries need specialized services like for example in the case of a flower shop that will outsource their delivery to a courier company.
In this scenario, the flower shop takes care of the other aspects of the business while their outsource takes care of the delivery of their products.
Each one works independently from each other but, are co-dependent on each for their revenues. The manufacturing industry also offers similar services.
They often delegate certain responsibilities to other companies that they team up with. The cleaning up operations and security services come from another agency which is not their own. This is another kind of outsourcing when referring to the local market.
However, going global is as mentioned the popular trend especially for services that can be delegated to another company that are not located in the same country as the original company.
These types of outsourcing should be flexible enough to meet the demands and need of their client. As an organization it is important to choose the right company to develop these technologies for them to use.
After all, their reputation and name are at stake here. Some of the largest risk involve has to do with quality and control. The organization will gain access to great resources in exchange for paying these services.