Outsourcing meaning

What is an outsourcing meaning?

Outsourcing is a common business practice of hiring a third party outside the company to take on the charge of specific activities. This is done to produce the output that is traditionally performed in-house by the own employees of a company. Generally done as a cost-cutting method, it may affect the jobs starting from customer support to the manufacturing of the back office.

Several people are discussing benefits of outsourcing
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Outsourcing came in evolution back in 1989 and it became a very important part of the business in the 1990s. This takes place when a business contract with an outside supplier to offer specific goods and services instead of doing the in-house work.

What are top benefits (advantages) of outsourcing?

It is a practice becoming popular day by day in the business world. Contracting with some outside party or some other business in order to take care of specific tasks and the processes rather than assigning or hiring employees and staff. This process became famous as outsourcing. And this can certainly help your company to grow while saving money when it is done properly and of course for the right reasons. This is something that offers many other advantages too:

Let you Pay Attention to Core Activities

The back operations of a company expand during the growth period. And this expansion may start to take in human and financial resources while you are busy on some less elementary business activities. Outsourcing these activities may offer you to refocus on in-house resources on the activities keeping you in the profits without sacrificing service or quality.

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Cut on Costs

When you expand the operations internally, it may not be cost-effective. This may apply to the equipment or your location as well. It may need office space, infrastructure, and other amenities ultimately increasing the expenses of your business.

Promote Efficiency

Outsourcing is one of the best options when the functions of your back office turn out to be complicated. And even the size of your company keeps you from attaining them at a regular and a reasonable cost. The increased costs of performing a specific task back office function can be exclusively high. So think about the functions which can be easily moved.

Keep the Operational Control

Business operations that are costly and out of control can be easily outsourced. Departments that have actually evolved over time into the poorly managed areas are the deserving candidates. An outsourcing company may often bring better management skills to your company that something that would be available to you.

Staffing Flexibility

Outsourcing permit operations that are cyclic or have got seasonal demands to bring in the added resources when they are required. In this case, an outsourcing can be released when you see the business slowing down.

Offers Continuity and Risk Management

High employee turnover may add some kind of uncertainty as well as an inconsistency to a business. Outsourcing decreases the risk that substandard level of operation may bring to the organization.

Develop Internal Staff

A large project may need skills that your staff may not possess anyhow. On-site outsourcing of the tasks, is an area where contractors or freelancers efficiently and expertly operate at their own location and may offer you the people who possess the skills that you need. During that time, your people can simply work beside them and attain the new skill set.

For all these reasons outsourcing has become such an integral part of the work culture today. It may get your business through a temporarily tough time and save you money. And this is not something that fits all. You can simply work with an individual contractor or contract with a large outsourcing company, depending on your business requirements.

Outsourcing Services

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Since the demand for outsourcing services has paced up due to its core benefits, there are many key services that come under its purview.

Outsource Customer Service and Lead Generation

Sales call count numbers. It means more the call more will be leads and sales. The moment first outreach is performed, closing the sales can be controlled by the internal sales force.

Intelligent salesperson skills, as well as expertise, can be effectively used to handle the clients and close sales instead of making cold calls. It may also be very much effective to outsource the customer support as compared to maintaining a qualified support staff so as to handle these tasks. This is mainly true for the product based companies.

Outsource Accounting and Bookkeeping

Let us start with the common understanding of bookkeeping. Bookkeeping can be taken as an act of keeping a record of all the financial transaction in a properly organized way. Additionally, accounting and bookkeeping are like the morning joggers. No one actually wants to take any time out to make it happen but it may somehow result in very serious complications after a specific period of time.

You may always have a chance to employ the dedicated individual to take care of your everyday bookkeeping and accounting activities. Though it has now become a practice for the companies to outsource all the bookkeeping activities.

There is plenty of advantage brought by outsourcing your bookkeeping activities. You can simply save your employees so that they can pay more attention to your business. At the same time, you will save some case as account outsourcing is far cheap if compared to employing an accountant and you also need to access the experts who may ensure accuracy and a lot more.

Outsourcing Social Media Marketing

Social media platforms are now not restricted to any personal communication. Today there are lots of companies which use social media channels like Twitter, Linkedin, Facebook and more for generating leads.

In fact the most popular messaging apps, Whatsapp is also used extensively by the companies. Advertising on these social media platforms is actually not an easy task to do. And such an activity will need a considerable amount of time too.

To elaborate: The company’s job does not come to an end with a single post on the platform. The company also need to engage in the queries and get back to its users.

Being an entrepreneur, it is better if you outsource this particular task of handling your social media to the marketing agencies. They do have a team of the skilled professionals to look after these tasks and their ultimate goals are to monitor your followers.

You can simply use the tool, as these allow you to add new team members while approving everything that they post on your business’s social media pages.

Most of the companies opine that these social media tasks can be handled easily by themselves only. They think it takes just 30 to 40 minutes a day to keep it updated and handle all the queries.

Well, that is a total misconception. And if you actually desire to enjoy the benefits from social media marketing campaigns, you need to invest a lot of time to increase your followers. So it is better if you outsource this particular activity to the experts out there.

Payroll Outsourcing

If in case you think you own a very small team, you would not experience any difficulties in managing the payroll system in-house. But when your company starts growing like crossing the number above 15 employees, taking care of these monthly payrolls may eat a lot of your time. It means that keeping track of worker’s desired payroll returns, loan advances, bounces advances, joining and exit procedures and employee leave turn out to be a nightmare very soon.

And when this is chosen properly, payroll outsourcing will be least expensive and a more straightforward means of filling your taxes on time and pay it to your employees.

Major reasons for Outsourcing

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Save on Costs

One of the main reasons companies go ahead with outsourcing is because of the cost factor. As a company, the cost efficiency is the crucial factors of all if you wish to improve the balance sheet of your organization. Quality product and fewer expenses are what every company looks for. According to a very recent survey, more than 70% of the companies outsource today to lessen their costs.

Approach to Skilled Resources

There is hardly any worry to train or recruit the expenses when you outsource your work. You simply need to look for the companies, quality of their earlier projects and you will see half of your work done. When you outsource, you get a better approach to the more skilled labor at comparatively fewer costs. It is observed that people go for outsourcing to have an access to credibility and skills of an organization.

Fast and Better Experiences

Since they are well aware of the advanced technology and the current changes in the IT industry, they are actually bound to offer the best services at a faster rate than the actual desired time frame. The reason behind this is very clear, it assists the companies in achieving the best reputation in the market. More quickly your ideas get converted, quickly it adds to the brand identity and value proposition.

Increased Flexibility and Efficiency

If you are seeking for flexibility of working hours and desired expansion then it is suggested to outsource your work. The reason is very clear that will be cap[able of enjoying the highest output of work, experienced project managers catering personal attention to all the projects.


Outsourcing is that business activity today, no business can think of denying. No matter the size of the company every business needs it. It actually reduces the operational work stress and you get your work done at the desired time. In current date, India stands out to be the major outsourcing provider across the globe enabling the wide diversity at the workplace.
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What does outsourcing mean and does not?
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What does outsourcing mean and does not?
Outsourcing is a common business practice of hiring a third party outside the company to take on the charge of specific activities. This is done to produce the output that is traditionally performed in-house by the own employees of a company. Generally done as a cost-cutting method, it may affect the jobs starting from customer support to the manufacturing of the back office. Read more...
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SITO: Software & IT Outsourcing
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