What are the different outsourcing Services?

Answer 1

It is no longer news that outsourcing is taking over the business environment. Companies and businesses can virtually outsource any business function - from legal to accounting, administrative, information technology, help desk, manufacturing, content development, just any business function. This massive demand for outsourcing company is tied to one huge factor - cost-saving, as well as tons of other benefits such as competitive advantage and leveraging skills that are lacking in-house. If your business is not yet leveraging outsourcing, chances are you are missing out on increased earning opportunities!

Different Types of Outsourcing Services

There are different types of outsourcing services that businesses can contract with an outsourcing company. Basically, outsourcing services are grouped into four;

• Professional service
• Manufacturing service
• Process-specific service
• Operational service

As more businesses seek to cut back on their overhead costs, these outsourcing services have grown increasingly popular. As mentioned earlier, the most benefit that comes from outsourcing is the cost savings, both in terms of labor costs and equipment costs. However, there is concern in the aspect of quality and control. But, there is no cause for alarm in these areas as long as a business adopts due process and diligence in hiring an outsource service provider.

Let's examine each of the above outsourcing services;

Professional Outsourcing Service

The business functions listed under professional outsourcing services include legal, accounting, information technology, purchasing, as well as other specialized services. This type of arrangement offers potentially increased cost savings, making outsourcing in these areas a popular trend. The most outstanding advantage is that a company gains access to high quality resources and does not pay beyond the services used. The ultimate outcome is significant reduction in a company's overhead costs.

Manufacturing Outsourcing Services

This type of outsourcing service is often industry-specific in its nature. A typical example is a car manufacturing company that can decide to contract an outsourcing service for making and installing windows in their automobiles. The biggest advantage that comes from using manufacturing outsourcing service is cost saving, plus decreased assembling time. However, there are also some concerns such as quality issues and interception of the product time. As mentioned earlier, these concerns can be greatly reduced by ensuring due process is followed in hiring an outsourcing company.

Process Specific Service

Outsourcing service can also be specific to an internal procedure or unique process. This is a suitable option for service organizations where the specific areas of the service can be contracted to another organization, so that the business can concentrate on the core areas of the service. A typical example is a bakery company; here, the delivery aspect of the business can be outsourced to a distribution company, providing it with customer contacts, delivery contacts as well as costs.

Operational Outsourcing Service

This type of outsourcing arrangement is common in the manufacturing industry. This is because there are tons of specific operational functions required in the manufacturing industry. For instance, equipment repairs and machine maintenance can be outsourced to a specialized outsourcing company.