Outsourcing is a fairly popular strategic business solution that involves transferring some functions or processes to third-party executors. With the right approach, it can increase the efficiency of doing business.
Feasibility of outsourcing
When deciding whether to purchase services or goods on the market or do everything yourself, you must rely on the following criteria:
- costs required for the production of services or products;
- quality of services and /or products;
- the business owners' strategy.
The main criterion affecting the transfer of the process (for example, outsourcing of logistics services ) or function to third-party execution is the competitiveness of the environment. Thus, a monopoly company is unlikely to be client-oriented and will take care of providing a competitive cost of its own services.
The key result of using outsourcing is the ability to reduce costs, which leads to an increase in business efficiency. This happens because the released resources can be used both for the development of new business areas and for investing in existing ones.
The main functions to be outsourced are as follows:
- financial record keeping;
- cleaning services for warehouse, office and industrial premises;
- legal support;
- employee training;
- translations of technical and business documents;
- IT services;
- trucking services;
- catering for staff;
- equipment repair and maintenance;
- advertising and PR services;
- security and safety of the premises.
Benefits and Risks
The benefits of outsourcing primarily include the following:
- the ability to save on payroll taxes, since no full-time employees are used;
- cost reduction and control, since the cost of services provided by outsourcing companies is lower than the cost of the customer when doing it yourself;
- staff reduction;
- concentration of the client company on the main tasks;
- freeing up internal company resources that can be used for other purposes;
- use of specialized knowledge, equipment
