Outsourcing has been a successful business strategy used by big companies for many years. Initially most outsourced work was in the area of low-skilled or unskilled manufacturing jobs and simple assembly tasks. For example, well-known American companies such as IBM and Apple have long used production centres in China for manufacturing.
More recently, as internet technology has spread across the globe, major technology centres have been established in countries such as the Philippines and India. These countries have become popular bases for outsourcing technology-oriented tasks, especially as the education and infrastructure levels improved to world standards. Both multinational and smaller businesses now outsource in the new areas of customer service, financial management and information technology.
Outsourcing is when a business uses freelancers or contracting companies to undertake some of the business’s tasks. These tasks range from repetitive to one-off and can be completed inside or outside the company premises. Projects are done by either a single person or contracting companies depending on the nature and volume of the tasks. Small-scale local outsourcing is a widespread business practice and happens when a business contracts out tasks for which it does not have in-house expertise. For example, tasks such as website design and development are commonly outsourced by businesses to local companies which have experience in these specialist fields.
Off-shoring is a type of outsourcing where the business operations are awarded to individual professionals or contracting companies in another country. This is usually done to take advantage of the country’s lower labour costs, favourable tax rates and technically skilled workforces. Website and software development are becoming popular off-shoring tasks to take advantage of skilled professionals from other countries.
Advantages of outsourcing (local or off-shore)
- Small to medium size companies gain access to experienced, knowledgeable professionals and expertise not available in-house,
- Cost savings can help your business to grow and expand as you win new business and increase profits,
- Off-shore professionals in popular host countries are given access to better-paying jobs,
- Productivity improvements thanks to contractors operating on shifts or 24 hours a day.
Disadvantages of outsourcing business process
- The quality or professionalism of service might not be the same,
- Failure to gain or keep knowledge within the company
- A loss of job opportunities from the source country
- Time zones may cause working hour imbalances.
There is little doubt that there can be many advantages for companies who implement an outsourcing program.
The key to success is to ensure there is careful planning and comprehensive risk analysis set up in relation to any possible disadvantages. With the right approach, any negative aspects of outsourcing can be minimised, providing advantages to all parties involved in the process.
Why not outsource your company’s website design project or mobile application program to Sushi Digital? Our team of experienced web designers and mobile app builders are second to none and provide a friendly, professional service.
Brought to you by the Sushi Digital Team. To find out more about how outsourcing your digital and mobile needs to Sushi can help your organisation, contact us on email@example.com.