Most of us probably know in general what the word outsourcing means. But in case there is still something that is not clear, and you did not have the chance to understand the crux of the matter, Forte Group experts prepared the list of core questions along with answers to them.
1. What is outsourcing as a process?
Outsourcing is the practice when a company delegates business processes or some functions to outside suppliers instead of hiring in-house employees and solving these business problems internally.
2. In which cases companies decide to outsource?
Of course, the reasons may vary in different companies but we can outline several main causes:
Company development brings new objectives and tasks that existing personnel can't handle. It is common in such cases that not just a few new professionals needed, but the brand-new department (or several).
As an example, we may consider a situation when a company which provides some services decides to launch a product from scratch. It has no developers, no QA engineers, no marketers and so on. Looking for and hiring new teams can be very time-consuming, while outsourcing can be a perfect decision in such situation, which will save both time and money.
Short-term need of a specialist
For example, if the project is experiencing difficulties, or some changes in business processes needed, a company pulls a business coach for this project through outsourcing. As soon as the processes are streamlined, the specialist stops their work for the company.
Cost reduction
Companies make decision to use outsourcing when they want to reduce expenses, which may involve high corporate taxes and high energy costs. Working with offshore staff for such purposes is a common practice.
3. What are the benefits of outsourcing?
Imagine that you are going to start your own business, carry out a new project or launch a brand-new product. You undoubtedly will need to gather a team to bring your ideas to life. One of the problems with building your team from scratch is the constant extension of deadlines. It happens that the search for one employee can drag on for a few months, and when you need to gather the whole staff, the scope of work increases several times.
General advantages of outsourcing are:
saving time on recruitment – everything will be done for you;
all the main risks and responsibilities for solving problems with the replacement and search for new personnel are borne by an outsourcing company;
cutting of operational costs;
improved efficiency and productivity;
increased competitiveness;
access to technology without the necessity to spend money to possess it.
4. What criteria should I use to select a supplier?
Building a strong team is half way to success. Your outsourcing partner is actually the part of your team. How to choose an outsourcing company wisely? Pay attention to the following criteria:
Cost
As we mentioned above, cost reduction is one of the main benefits and at the same time main reasons why companies resort to outsourcing. So, it is important that an outsourcing company offers prices that enable you to save money.
Vast experience
It is good if the supplier has rich experience cooperating with other companies. You may ask for references, however note that the outsourcing company may have confidentiality agreements with other clients. In this case, you may ask for general project descriptions. Do not hesitate to ask for information about qualifications and experience of project managers, team leads and other members of the team.
Resources
Among the advantages of outsourcing we aired the access to technology without the need to spend money to own it. So, it is a big plus if the supplier has resources that are unavailable to you internally.
Reliability
From the beginning of your communication with the supplier you will make some, even small arrangements and thus you will be able to understand if your potential partner honours commitments. If they always deliver on what they promise, you can just rest assured. Pay for value, not for promise.
Partnership approach
It is important to establish a professional relationship based on trust and team spirit between you and your supplier. If you recognize how important your partner outsourcing company to your business, and the supplier, in turn, acknowledges how important your business to them, your partnership is more likely to be successful and efficient.
If you have any more questions about outsourcing, please feel free to ask – our experts are at your service.
