The year 2020 emerged as the time for survival fight in human history. The whole world is suffering from a pandemic known as COVID -19. All the economies around the globe are shattered because of this pandemic, and businesses are moving in the stage of wind up. According to the current business environment, the whole businesses should take to remedy their existence and development. As businesses work towards operating in a changing environment following the COVID-19 pandemic, many of them are expected to outsource more work according to a report by technology firm NTT. So in this situation, we should need to know the importance of outsourcing in business.
The’2020 Global Managed Service Report ‘, based on a survey of 1, 250 executives in 29 countries, said that 45% of organizations will outsource more than in source in the next 18months, with 57% citing security risks as a key challenge of managing IT in-house. Reading this raises a question on the inside of us.
What is outsourcing? What is the purpose of it?
An organization seeks the help of an external agency or service provider to perform any of its processes or functions is called outsourcing. This is usually practiced by many organizations to reduce the cost of operation and time. Sometimes it is necessary to contract with an outside agency to perform a process or function if the organization is not having sufficient expertise or competent people to perform that function. Companies today can outsource a number of tasks or services. They often outsource information technology services, including programming and application development, as well as technical support. They also outsourcing customer service, call service, manufacturing processes, human resources tasks, and financial functions such as bookkeeping and payroll processing. Companies can outsource entire divisions, such as its entire IT department, or just parts of a particular department.
Companies often outsource as a way to lower costs, improve efficiencies, and gain speed. The following are the major advantages of outsourcing
- Minimization of cost: – Organizations need not maintain the staff and other facilities if it contracts with a third party to outsource a process or function.
- Concentration on core business: – Organizations may shift their focus on some other core issues of business by way of outsourcing.
- Outside expertise: The -Availability of expert service is a significant aspect of outsourcing. Otherwise, organizations need to maintain expert personnel permanently and bear the heavy cost on them.
- Efficiency meets customer demands: – Outsourcing enables an organization to outsource market research and surveys in order to identify customer needs. This helps them to manufacture products and services as per the demands of the customers.
- Revenue increase: – Companies often decide to outsource supporting functions within their businesses so they can focus their core competencies, thereby helping them gain competitive advantages in the market and increase their revenue.
During this difficult period, it has many companies in a panic and doing everything possible to ensure that they survive. Especially when you consider that such a large percentage of companies have slashed their budgets in the wake of COVID-19, so outsourcing might just be the logical solution for both their finances and peace of mind.