subject: Understanding The Concept Of Outsourcing [print this page] Outsourcing is a practice readily accepted by a lot of big firms nowadays. For the handful few that are still in the dark about the term, it is defined as a business strategy utilized by a company to delegate a certain task to another firm and let that firm do the task on behalf of the company. The company seeking outsourcing is referred to as the client while the firm who accepts the task is called business process outsourcing company or BPO.
There are various business operations that can be outsourced as deemed necessary by the business owners. An example of which is the hiring process. It takes a lot of time and resources to hire a new employee especially if the turnover rate of the company is high. In order to lessen their stress about the matter, they can opt to outsource the hiring process.
Another business operation process that is typically outsourced is the production or manufacturing of goods. A lot of companies who are into manufacturing would rather focus their time on research rather than the production of goods so as to keep up with the trends. The BPO company will do the production while the client spends their time researching in order to innovate and discover new products to produce.
Production outsourcing and off shoring is not one and the same. Off shoring is another business strategy used by companies that would like to put up their manufacturing plant in a foreign country. The plant is still managed by the same company but it is located in another country.
The major factor being considered during production outsourcing is productivity. In the BPO world, this is often tagged as Service Level. The BPO understands and should follow the number of output that should be finished by the hour of every single day. If the BPO cannot comply with the client's demands, the production will most likely be pulled out.
Another critical factor in terms of prototype outsourcing is quality. The quality of the products should remain in the highest possible level in order for the brand name to keep its image. All clients are very specific about this; they simply refuse to accept substandard output. Poor quality products are considered as waste of money and resources.
