Increasing the Organisational Efficiency by Outsourcing

The world of internet has brought us closer to our clients and has created novel ways to cater to them. Also, it has brought us closer to people who can help us accomplish our business tasks. With increased and world wide access to web, companies now develop strategies to use the internet to their best.

Outsourcing is one such method; a business to business model wherein the company transfers some of its tasks to another organization that specializes in it. It is cost effective, as setting up an internal wing for such tasks that are non core functions of the company, may be costly. Also, it reduces the pressure on the company and it can focus better on its major functions. The third party providers or service providers are of a major utility to companies as they have specialized tools and trained personnel for the task at hand.

An example of a manufacturing company outsourcing would be HP buying some of its computer components from another manufacturer in order to save on production costs. Another form of outsourcing may hand over book-keeping duties to a third party independent accounting firm.

Outsourcing has various benefits that increase the efficiency of the task at hand and provide better results. The company gets more time to focus on its betterment and cater to clients. Expertise staff makes sure the task is completed with accuracy and finesse. Whereas the company’s other staff who would have otherwise been occupied with such non-core functions is now more focussed at important tasks. Also, the third party provides the company with the knowledge on latest developments in the field and hence whether the company chooses to expand the business or cutback the capital; it has all the assistance at hand.

Expanding the scope of outsourcing can multiply such benefits, some experts say. “One simple example is accounts payable and receivables,” says Jag Dalal, managing director of thought leadership at the International Association of Outsourcing Professionals (IAOP). “If you outsource only one function, you limit your benefits. If you outsource both, you get a value beyond improving the transactional component because the outsourcer can see when cash comes in and goes out. That can help the company take best advantage of the cash on-hand and optimize internal processes.”

Success of an outsourcing campaign depends on three factors; support for the outsourcing task at the executive level, appropriate communication with the concerned employees, and the client’s ability to manage the third party provider. Outsourcing professionals need skills such as negotiation, communication, project management, the ability to understand the terms and conditions of the contracts and service level agreements (SLAs), and flexibility to adjust with the changing business.

International outsourcing becomes more of a challenge when factors such as cultural differences, different time zones, language barriers; come into picture.

One of the major non-core functions is bookkeeping. No company really wants to employ its resources into it, but avoiding it leads to serious problems. Thus Outsourcing Services is the best option to deal with it.