Companies that Outsource Business

Companies that Outsource Business

Companies that Outsource Business

Throughout the history of America business has been using outsourcing to expand their profits and knowledge. Over the years, businesses in America have used outsourcing to overcome the lack of knowledge, skills, and to specialization within the business. The history of outsourcing can be traced to so many different periods history. America greatest historical moments of outsourcing would be the industrial revolution. Outsourcing in foreign countries would be most seen during the industrial revolution because so many businesses that outsourced the next steps in production or in the business expansion. The question one may ask is what exactly is outsourcing? What is the purpose of outsourcing? What are the benefits and disadvantages businesses face when they choose to outsource? What are the effects of outsourcing?

Outsourcing is the allocation of business processes to a specialist external service provider. Most business choose to outsourcing their business or company because of some key factors; lack of expert within their country in a specific field. Businesses want cheaper labor with the same quality output. Outsourcing allows companies the ability and possibility to concentrate on other parts of the business that need more attention. The most common parts that business usually out outsourced are: web design and maintenance, recruitment, IT maintenance, logistics, manufacturing, and technical/customer service. These parts of business are easily outsourced because other major gain on profits and wanting to spread the business and industry.

When a business that chooses to outsource to a foreign county to gain access to a high quality services at a lower operating cost it is called offshore outsourcing. Businesses choose to outsource the company's internal parts, technology, and software is call business process outsourcing (BOP). Businesses that outsource parts of the business that are not vital to the business but have some significant. Businesses that choose to outsource the processes; outsource customer support, payroll to save on the cost of this particular process in the company. A company can also divide its departments into back office and front office outsourcing. Back office is outsourcing internal roles and front office is outsourcing call customer service areas of the business. Today companies that outsource, outsource the technology part of the business generally outsourced to India, China, and Russia. These countries are the leaders in the software business.

Outsourcing has many effects on the business some are negative and some are positive. Outsourcing can lower the value of production and but it can also improve the quality. It can also improve customer service but at the same time hurt the business in that area. Outsourcing can be a disadvantage to the business. A business runs a risk of disclosure of confidential data. The businesses payroll and human resources information is at risk of leaking to competitors. When outsourcing there could be a hidden cost when crossing international business boundaries and business may still have to follow their home country regulations. Regulations from country to country change for instinct in America we think it is unethical to receive or send gifts for business reasons but unlike America other country to receive or send a gift are a way to keep and gaining new business. When having outsource customer service there could be a language barrier even lack customer focus.

Outsourcing has be a great achievement for a business. When a company makes the decision to outsource it expands the company to grow and puts an increase on revenue and enhance the returns on investments. The company can also receive a lower labor cost and freeing up management time so they are able to focus on other parts of the business. The businesses that have outsourced reduce spending when they choose to use foreign labors because of the difference in wages between western countries and Asia. Business feel it the same work can be done at cheaper rate why not outsource to that country. A business would have an expenses of savings around sixty percent by outsourcing in India; with the quality staying fairly the same. The customer service would be a great improvement because of the time zone differential so there is around the clock help for support. Having a business outsource the business could then go to the next level within the industry because of the increase in revenue, service and productivity.

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