Driven by the cost advantages, and high level quality work provided by the service providers, most companies in the US are adopting outsourcing as a major factor in their business strategy models. More than the cost and quality advantages, strategic outsourcing allows a company to free up its resource bandwidth which was earlier allocated to executing non-core business tasks. With more resources at their disposal, companies can get the resources to focus on the core business needs.
A combination of factors drive strategic outsourcing as a plan for business to adopt it as a part of their goals to meet the company’s bottom-lines. Managers at every level have started believing that outsourcing their non-core work overseas is the best possible option for them to reduce time investment on the part of the company’s resources and get the work done in a cost-effective manner. Strategic Outsourcing can be by a company by it deciding to hire the services of a 3rd party service provider overseas with major non-core tasks like Accounting, Transaction based Data Entry, Customer Service being the primary functions being outsourced. With new services like Logistics Outsourcing mapping the Outsourcing radar, outsourcing ensures the company to send most of its non-core tasks overseas.
It also allows the company to focus on its core skills which are directly linked to their revenues. Many factors support the success of an outsourcing contract. The 3rd party service provider should have the skill-sets and resources to be able to do the work outsourced to them. The client company must ensure they handle the process and the project management. The success or failure of the outsourcing contract heavily depends on how the company manages the quality and delivery aspects of the outsourced work with the 3rd party service provider. Last but not the least, even if the company is outsourcing non-core processes to 3rd party providers, it needs to ensure that data leaks and the security and confidentiality of the project is maintained at all costs. Though, there are no shortcut strategies to it, but companies are coming up with clauses in the contract which encapsulates the data security and confidentiality aspects of the project.
As an example, a company may decide to outsource its IT maintenance tasks overseas. This allows the company to allocate its resources to provide new IT solutions to its customers. Depending on the products the company launches, it can also look at allocating its resources to Research and Development.
With strategic outsourcing heavily cutting down costs to a company in terms of non-core processes, a lot of companies have already started working on a model which allows them to outsource core tasks of their businesses.