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What is Outsourcing and Why Is It Advantageous? By definition, outsourcing is the process of allocating or delegating business operations and tasks to an external service provider. It’s safe to say that the primary or original reason why outsourcing as a concept was born is because companies and large corporations realized that it wasn’t effective or efficient to handle all aspects of the business process internally. In other words, the number of workers or maybe their abilities aren’t sufficient to cover all essential tasks. But aside from that, another reason why outsourcing has become quite a trend for businesses and companies is because there are processes which are temporary in nature, which means that it isn’t practical or sensible to hire full-time workers or professional to perform those tasks. Theoretically, once a specific task is outsourced, it is expected that the service provider will take the responsibility of performing it to the best of his/her ability. Being the manager or decision maker of your organization, you need to fully understand what the advantages of outsourcing are, especially if you plan on using this approach one of these days. 1 – Outsourcing is associated with cheaper labor.
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It’s no longer a secret that one of the most prominent recipients of outsourcing today are companies offering support services. The concept of outsourcing support services in fact has become a lifeblood for many companies in developed countries because with this approach, they can save a lot of money by employing external service providers to do many types of tasks or jobs for lesser pay compared to when they have to employ full-service or inhouse employees.
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2 – Companies get an opportunity to focus more on core business processes. By opting for outsourced support, your organization can shift your focus to the more important development of core business process. Therefore, you will be able to save a lot of time and effort since you no longer have to put that much attention to support processes. 3 – Significant reduction of overhead costs. By outsourcing some of the support services or other tasks that you normally will delegate to employees who you pay full-time and who occupy office space, you can instead outsource them so that you no longer have to top dollar merely for office maintenance. In the past, a company’s growth usually meant having to accept the need for additional office space, but that’s no longer the case because of the benefit of outsourcing. By taking advantage of external service providers, you can avoid spending additional money on expanding and adding office space because you don’t have to in the first place.