What is Outsourcing? The Benefits of Outsourcing in Business.

What is Outsourcing? The Benefits of Outsourcing in Business.

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We have learned a lot in the last few months affected by the global pandemic, be it personally or professionally. The WFH model is something unexpected for everyone at the beginning, but we are getting more comfortable with each passing day. During this time, the outsourcing industry rose to prominence, attempting to meet these market trends with new solutions. India has emerged as the major destination for outsourcing owing to its evolution with constantly changing requirements. Our country has everything to offer offshore businesses from cost-effective solutions to skilled staff, service quality improved productivity and business process excellence.

Outsourcing is a business practice that allows companies to entrust the processes of their business functions to outside parties on contracts. It helps companies to get your job done at a lower cost and better quality too. Companies that practice outsourcing require no hiring of new employees or assigning those tasks to the existing staff. It has become a popular way for businesses to lower rising operational costs and increase their global market value. 

Mentioned below are some of the business functions that can be outsourced from an offshore location: 

  • Information technology-enabled services
  • Knowledge process outsourcing
  • Legal process outsourcing
  • Research process outsourcing
  • Customer interaction services.

Back-office transactions, IT and software operations, Finance and accounting services, Human resource services, and knowledge services are different areas that some outsourcing companies specialize in. 

Outsourcing is mostly occasional, like a company wanting to collaborate with an external vendor with the work profile of an accountant to do their taxes once a year. Sometimes, it may be a regular part of some companies, where they make their cleaning work done from a cleaning firm on contracts instead of hiring janitors as employees. Gone are the days when benefits from outsourcing were only available to multinational companies. Nowadays businesses of all sizes from sole proprietors to large corporations can help their company grow and expand by keeping expenses as low as possible.

Mentioned below are some of the key benefits of outsourcing services: 

  • Focus on core business work 
  • Minimize Overhead Expenses 
  • Lower Labour costs 
  • Develop internal staff 
  • Provide risk management 
  • Provide continuity 
  • Time zone advantage 
  • Faster and better services

What is BPO?

BPO is the abbreviation of Business Process Outsourcing. It is a specific form of outsourcing allowing a company to contract with an external service provider. The third-party will have to responsibly perform all the assigned tasks. Payroll Accounting, Telemarketing, Customer support, Data recording, and Social media marketing are some of the BPO services.

Different types of BPO services

BPO is divided into two categories such as back office and front office. Internal business processes like billing and purchasing come under the back-office services. Customer interaction services like Inbound sales, outbound sales, help desks, customer service centers, and telemarketing along with document management services like accounting and finance come under the front office BPO services. 

The future of outsourcing

Currently, outsourcing has become the top business trend worldwide. Now the biggest question that comes to everyone’s mind is what will be the future of the outsourcing industry in the next decade? Global outsourcing seems to be promising where India has turned to be the most preferred destination with a large pool of skilled manpower– MBAs, Doctors, Chartered Accountants, Lawyers, Research Analysts, etc., which strengthens its position globally. In services like KPO, Content, and Medicine, India will tend to flourish even more. According to NASSCOM, India is predicted to evolve as a global hub for knowledge services in the coming years.

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