Outsourcing simply means subcontracting work, whether essential or non-essential, to a third party specialized in that particular task, located in the same country or abroad. When the service provider is located in a different country, the outsourcing process is more specifically called Subcontracting. Outsourcing or outsourcing is a constantly growing industry estimated at $20 billion today, with most of this outsourcing pie being received by emerging economies such as India, China, Brazil, the Philippines, and Mexico. So what are the various types of outsourcing processes and how can a business benefit from them?
Outsourcing is of multiple types such as Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO), Medical Outsourcing, Account Process Outsourcing, Legal Process Outsourcing (LPO), etc. In BPO, which is the most common form of outsourcing or subcontracting, secondary tasks such as payroll maintenance, maintenance, and customer support are handed over to companies with proven experience in the field. Similarly, a company might want to outsource its accounting processes to a service provider in India or another country. With over 1.8 million patents filed annually, Legal Process Outsourcing or LPO has also become a booming industry. Legal services can be obtained at much lower prices in India than in the US and are held to the same high standards. Not just patents, even routine legal services like filing affidavits are outsourced to third parties as part of the LPO.
Some companies specialize in providing knowledge-oriented services related to research and e-education, constituting the burgeoning knowledge process outsourcing (KPO) sector. Even hospitals have not lagged behind other sectors and are actively outsourcing medical transcription and billing processes to cheaper destinations like India. In fact, medical transcription offers a new window of opportunity for many young people in the developing world, especially women, to earn a steady income from moderately skilled work.
So what are the benefits of outsourcing?
Outsourcing has many obvious benefits, such as reducing a company’s overall operating costs. By outsourcing secondary tasks, such as cleaning, to a third party, the company can concentrate on its core areas, such as software development. In addition, fixed costs, such as employee salaries and benefits, can become variable, as the business no longer needs to provide salaries, maternity leave, travel, and famine allowances to employees on the partner’s payroll. overseas service, all of those essentials are concerns. of the last. This represents huge cost savings, which is especially helpful during financial downturns.
Another benefit of outsourcing is that offshore service providers provide the same high-quality service, so it’s not low-quality work for low fees, as many assume. In addition, the project team members absorb very quickly the working culture of the client company based in the US or UK and also possess excellent communication skills to complete the task in the shortest possible time. Outsourcing has also made continuous development possible, which means working in a constant cycle without interruption, drastically reducing development time. While the UK-based team works during the day and sleeps at night, the India-based team, enjoying the day, takes over the task, making continuous development possible.
Outsourcing also has certain invisible benefits, such as gaining a foothold in new markets, understanding the psyche of people before introducing a new product or service abroad, and also certain obvious financial gains in the form of tax benefits, land concessions, etc. Not surprisingly, outsourcing is here not only to stay, but to grow by leaps and bounds for the foreseeable future.