Outsourcing Basics

Article Highlight: 12 Reasons for Outsourcing

There are numerous reasons for outsourcing some types of work functions. Business owners and corporations choose this option as a way to save money in company operations, maneuver the company into a more competitive… Keep reading »

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The concept of outsourcing was first practiced in manufacturing and spread into other industries, including white collar businesses. These businesses realized the financial advantages of outsourcing specific business functions that were better served by companies that specialized in that arena.

Reasons for Outsourcing Jobs

There are numerous reasons a company might outsource jobs. Providing certain in-house functions are often cost-prohibitive, so turning over those functions/processes to a third party is often more cost effective for a business. Expertise in some industries is often limited to fewer professionals, so a third-party company offering that expertise is often a better and more affordable solution.

Companies Choosing to Outsource

Many jobs once budgeted solely as staff positions are being re-evaluated to determine if outsourcing makes more sense., Some of the most commonly outsourced tasks include, web development, call center services, marketing, cold calling, information technology functions, and more. The increase of outsourcing lead to the birth of new occupations, such as that of the Virtual Assistant.

Risks and Benefits of Outsourcing

Outsourcing has pros and cons. Most importantly, there is always a risk when a company gives up control of a procedure or process that can impact their business. For workers, outsourcing may be the best way to find employment in an industry they wish to pursue.

Popular Jobs Outsourced

There are several types of jobs that are popular to the outsourcing industry. These industries include, IT (Information Technology), graphic arts, sales, medical, and some machine servicing jobs.

Information Technology Outsourcing

Tech support is the largest arena within IT (Information Technology) industries that is often outsourced. By using third-party companies to provide support for their hardware and software products, companies free up resources for R&D (Research and Development) and other areas vital to their business and products.

Graphic Arts Outsourcing

Most companies require some type of graphic art for their business, but only larger corporations can justify the cost of a full-time graphic artist or an art department. Companies that cater to businesses by supplying graphic art production make an excellent outsourcing partner for these companies.

Medical Industry Outsourcing

There are several jobs that the medical industry outsources to businesses that specialize in services that cater to their industry. One such industry is medical billing companies. Private and clinic doctors find this type of outsourcing more efficient and time saving than tying up the office staff with billing issues.

Sales Force Outsourcing

Many companies reassess the expenditures for their sales force and decide to farm out various processes. These third-party companies generate leads for the sales staff, offer customer service and even account management.

Servicing Equipment Outsourcing

Some equipment company manufacturers often outsource their maintenance department, especially road service jobs. Many companies, such as airlines, outsource their maintenance to companies within their own country while others often outsource to other countries.

Using Outsourcing to Your Advantage

If you have specialized, in-demand skills, you may discover you're more opportunities as an independent contractor than as a staff member. Many people like the idea of working independently. Some view the increase in outsourced work as an opportunity to create and build a consulting practice.

Outsourcing Basics