Outsourcing is the general term given to the change in business model. The strategy involves hiring a global service company to perform certain business tasks, usually the non-essential ones.
With so many types of outsourced services today, client companies found an ally in them, seeing such process as a cost-saving measure. On top of that, the Philippine business process outsourcing leads to an efficient flow of business operations.
For entrepreneurs who are not yet internet savvy, it pays to have a basic understanding of what worldwide outsourcing is and the profits it can give. For a start, there are two main categories of the entire process — back office and front office outsourcing.
Back office simply refers to outsourcing mostly internal functions or activities like human resources, finance and sometimes, accounting. On the other hand, front office is customer-related. Communication companies and those with large customer bases deem front office outsourcing very vital to their operations.
However, this category of open wide outsourcing encompasses tech support, marketing and customer-related services. Healthcare, insurance, shipping and logistics are now also being outsourced.
Another categorization of outsourcing is by location which uses such terminologies as offshore, near-shore and onshore outsourcing.
There are times when a client firm from the West chooses to hire the services of an external partner that’s located overseas or in another country like Asia. This pertains to offshore outsourcing.
Among the many reasons why international companies continue to use offshore outsourcing is to reduce overhead expenses. Other reasons include: to access the innovations and developments of more specialized providers and to make internal processing more efficient.
Near-shore outsourcing is when a client contracts business functions to a company within its geographical proximity. Companies like to outsource to its neighboring countries because they share more or less similar cultures and time zones. An example of this would be, a US-based company typically contracts a vendor located in, say Canada or Mexico.
Lastly, onshore outsourcing is when a client firm contracts business processes with another firm that’s located in the same country. This is also known as domestic outsourcing. Some clients prefer this type since they may not be able to find the needed expertise elsewhere. They also find it advantageous and convenient to visit the external service provider especially when working on a specialized project.
Organizations that have been business outsourcing their solutions have enjoyed tremendous benefits. They experienced becoming more flexible, mostly in terms of turning fixed costs into variable ones. Imagine your company being able to control expenditures and cash outflows more! That’s the advantage of having variable costs.
Your own firm can focus more on achieving your objectives as there’s your external provider, the Philippine Outsourcers who are looking after such minor concerns as customer care and payroll. When you can devote more time for your business core, chances are, your firm will be able to grow at a much faster rate.
Newbie entrepreneurs who are eager to try business solutions and outsourcing should weigh the pros and cons before going for it. When you’ve decided, choose the best provider in the Philippine outsourcing industry.