Business Process Outsourcing
Businesses of all sizes face the continual challenge to reduce costs and stay competitive in fluctuating markets. Often, resources are employed to manage and control expense activities, that, while necessary for business operations, they are not concentrated on core activities.Talk to us about how we can provide solutions to help you reduce costs and manage your non-core activities, providing full transparency and expense control.
Let’s Define Outsourcing Models
Generally speaking, you can define outsourcing based on what is being outsourced and how the service is delivered. Below are the five common outsourcing models.
Staff augmentation
Not all companies hire outsourced help so they can push some
tasks off their plate and focus on other more important things. Sometimes,
companies outsource because they need more skilled people but don’t necessarily
need their services full time, or don’t have the resources to pay for it. This
is where staff augmentation comes in. This model is usually used when a company
decides to offer add-on services that they currently lack, e.g. support
services for market expansion.
Project-based outsourcing
As the name suggests, project-based outsourcing applies to
companies with one-off or irregular projects. Often, these projects are of low
to medium complexity and have well-defined requirements and deliverables.
Companies outsource these projects so they can have a dedicated team to take on
the job, causing little to no disruption to their regular operations.
Out-tasking/Contracting
This approach involves the transfer of a specific process or
service from a company to the outsourcing partner. Out-tasking engagements are
best for business owners who wish to keep control over the process being
outsourced. It may involve licensing, wherein the buyer obtains permission to
use the other company’s intellectual property or contracting, wherein the
external supplier performs a set of tasks or manages a group of processes for
the buyer. Contracting is somewhat similar to staff augmentation in that labour
is used on an hourly, daily, weekly, monthly or yearly basis.
Managed services
Managed services refer to the proactive management of
backend office functions or infrastructure by the third party on behalf of a
company. In other words, a managed service provider (MSP) assumes all ongoing
responsibility for handling, monitoring and problem solving for selected
business functions. Managed services are common for IT functions, but this may
also include outsourcing of HR activities, daily operations and production
support.
Offshoring
In this outsourcing model, a company locates its own
dedicated resources in another country. A good example of this is Australian
companies relocating their contact centres in the Philippines. This allows them
to leverage top talents at a relatively lower price while maintaining
control over their process and service delivery. Offshoring also allows
companies to get closer to their clients and to gain access to new market
opportunities.
Conclusion
Choosing an outsourcing model that fits your business can
give you the flexibility and capability to achieve your goals and sustain your
growth over time. More importantly, the success of an outsourcing project
depends on the third party you work with – so choose only the best outsourcing
partner.
