Outsourcing types and their benefits

2019-05-16 Business No comment

Outsourcing simply means outsourcing work [necessary or non-essential] to a third party specializing in that particular task, located in the same country or overseas. The outsourcing process is more specifically referred to as "outsourcing" when the service provider is located in a different country. Outsourcing or outsourcing is a growing industry, currently estimated at $20 billion, and the largest part of this outsourcing is emerging economies such as India, China, Brazil, the Philippines and Mexico. So what are the various types of outsourcing processes? How can companies benefit from it?

There are many types of outsourcing, such as business process outsourcing [BPO], knowledge process outsourcing [KPO], medical outsourcing, account process outsourcing, and legal process outsourcing [LPO]. In BPO, this is the most common form of outsourcing or outsourcing, and non-core tasks such as payroll maintenance, housekeeping and customer support are handed over to companies with recognized expertise in the field. Similarly, the company wants to outsource its accounting processes to service providers in India or other countries. Legal process outsourcing or LPO submits more than 1.8 million patents per year and is also a booming industry. In India, the price of legal services is much lower than in the United States and has the same high standards. Not only patents, but even daily legal services such as the submission of 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, forming a thriving knowledge process outsourcing [KPO] department. Even hospitals are not lagging behind other industries and are actively outsourcing medical transcription and billing processes to cheaper destinations such as India. In fact, medical transcription provides a new window of opportunity for many young people in developing countries, especially women, to obtain stable income from moderate technical work.

So what are the benefits of outsourcing?

Outsourcing has many obvious benefits, such as reducing the overall operating costs of the business. By outsourcing non-kernel tasks [such as housekeeping] to third parties, companies can focus on their core areas, such as software development. Since the company no longer needs to provide wages, maternity leave, travel and family allowances to employees on overseas service partners' payrolls, fixed costs such as employee salaries and benefits can also become variable costs, all of which are of concern. The problem. The latter represents a huge cost savings, which is especially useful during the financial crisis.

Another benefit of outsourcing is that overseas service providers offer the same high quality of service, so there is no doubt that low-cost, low-quality work is as much as many people assume. In addition, members of the project team quickly absorbed the work culture of US or UK client companies and had excellent communication skills to complete tasks in the shortest possible time. Outsourcing also makes continuous development possible, which means working in a constant cycle without interruption, greatly reducing development time. Although the British team worked during the day and slept at night, the Indian team who enjoyed the day accepted the task, making sustainable development possible.

Outsourcing also has some intangible benefits, such as having a place in a new market, understanding people's psychology before introducing new products or services in different places, and some obvious financial gains obtained by means of tax incentives, preferential land, etc. It's no wonder that outsourcing is here, not just to stay, but to achieve leapfrog development in the foreseeable future.

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