Dissecting Outsourcing

Outsourcing is not simply a business strategy, put that in mind. If you really want to educate yourself about this global industry, we’ll help you out. There is so much more than meets the eye when it comes to this industry. First, let’s lay out the basics. Outsourcing is when a company or a business hires another company or business to accomplish particular tasks, processes or responsibilities.

There are two types of Outsourcing, Third Party and Shared Service Center or SSC. When it comes to Third Party, the services are carried out and owned by a separate company. SSC on the other hand, the mother company still owns the outsourcing subsidiary. In this sense, OFFSURE is a third-party outsourcing.

Outsourcing Strategies

Outsourcing is mostly perceived as a geographic activity with companies utilising outsourcing services being accomplished overseas. To be more specific this strategy, also the most common strategy is offshoring or offshore outsourcing.

There are however different strategies when it comes to outsourcing.

Onshoring – Also referred to as onshore outsourcing is hiring a provider located in the same country as the client. For example, an accounting company in New York is looking outsourcing some of its operations in the West. Therefore, the company decided to outsource its services to a provider located in Los Angeles.

Nearshoring – From the name, nearshoring is outsourcing work to a nearby country. This eliminates other barriers present in offshoring like different time zones, different cultures, different economic stability and geographic factors.

Here’s a good example. Carlton & United Breweries in Melbourne wants to expand its products to New Zealand. The company then decided to outsource its production to an outsourcing company in Auckland, New Zealand. There is only a two hours gap between Melbourne and Auckland. The two countries also have a healthy relationship with their cultures almost like each other

Multisourcing – This strategy relies on quantity first and then the quality second. Multiple providers are hired by a single client to carry out a particular operation or sell products and services.

Crowdsourcing – Outsourcing is primarily a cost-effective move. Despite being a category under outsourcing, crowdsourcing is basically asking for volunteers or soliciting contributions.

For example, an apparel company posted a notice on Facebook asking for unique designs for brand new t-shirts. Graphic designers then create their own shirt designs based on their ideas and then pass it on. Crowdsourcing is mainly voluntary. There are, however, some crowdsourcing campaigns that are also presented as competitions with the best contributions receiving prices or accolades.

Offshoring – Once again, the most common type of outsourcing is offshoring. Offshoring is basically hiring a third party overseas to handle business or company operations.

Outsourcing and BPO

Think of it this way, outsourcing is the mother ship, BPO is just a spaceship pawn. The two are the same, based on definitions handed by millions of individuals active in the industry. It is also because the most outsourced services or activities are under the BPO category.

  • HR and Recruitment
  • Customer Service
  • Payroll and Invoicing
  • Bookkeeping
  • Finance
  • Accounting
  • Manufacturing

These services are the most outsourced activities by thousands of companies worldwide. The two on top are of course customer service and manufacturing. By outsourcing these services, the company is able to focus on its core activities and the distribution of work is efficiently distributed.

  • Core Activities-Tasks-Processes – These are not the same as the “core activities” mentioned above. Core ATPs are the primary operations being carried out by the company. For example, Nike is all about manufacturing sports items and apparels. That is what Nike is known for, for their products. Nike, however, is also active in maintaining their websites, social media accounts and thousands of servers. If they decide to outsource these services, it will then fall to Non-core ATPs.
  • Non-Core Activities-Tasks-Processes – Going back to Nike. Recruitment nor website development is not Nike’s main business. However, the giant still needs a recruitment and website development teams. These operations, if outsourced, are then the non-core ATPs.

OFFSURE’s Stature

OFFSURE provides offshoring services to businesses all over the globe. The company is not limited to one or two industries. OFFSURE caters to both Core and Non-Core ATPs.

We also utilize several technologies to break down barriers like with distance, we made use of video conferencing technologies and online messaging programs. The executives, management and employees also utilises various web-based conferencing and collaboration tools like MS Sharepoint.

OFFSURE will be and will always be an offshoring company since our target clients are situated overseas. The company and its employees will never resort to multisourcing since the services we provide are not limited to BPO ATPs. With that, OFFSURE is, in fact, a KPO provider with the type of services we are capable of.

Nearshoring is also near impossible since most of the countries near the Philippines are also top players in the industry.

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