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Business outsourcing is not without risk to a company. Then again, businesses that choose to take a chance and chase after the bigger picture are the ones with the likelihood of becoming successful. 

The internet age ushered in a whole new level of business outsourcing. While the outsourcing industry has been around since time immemorial (case in point, outsourcing manufacturing of spare parts in other countries), it was when the boom of online and high-speed connections when outsourcing took a drastic turn that changed the lives of the workforce world. 

Business outsourcing then leveled up from factory manufacture and production. Outsourcing started to include specific services such as accounting, telemarketing, payroll, data encoding or recording, customer support, sales, social media marketing, etc. 

Studies reported that 54% of companies require assistance via outsourcing. Business outsourcing happens when a company decides to hire the services of an external company or a different company or vendor to fulfill its business needs. Outsourcing can fall into three categories: offshore, onshore, and nearshore. Offshore is when the workforce or vendors are hired or working from a different country, while onshore is the exact opposite, where services are found within the same country. Nearshore refers to neighboring countries, i.e., the United States and Mexico.  

Why do companies see the need to outsource?

Many risks accompany the decision to hire and acquire outside the range of location of a company. But then it’s because of that same risk that most businesses were to be able to grow successfully and reach their goals. 

Companies choose to outsource to increase their profit. For example, hiring contact centers in countries with lower salary rates proved significant savings for companies. This could also allow the companies to increase their customer support agents while saving the company money, time, and resources.

Outsourcing could also provide more support and chances to cater to a broader and more varied group of consumers, which is favorable to any business. Research has shown that companies who opted to outsource their sales and customer services are seeing faster growth and expansion.  

Outsourcing can open up the business to an opportunity of accessing and networking with the top global talents in the field. International talent could consist of a diverse team of people with particular skill sets in specific markets. 

Types of Business Outsourcing

The industrial revolution boom marked the labor force’s rapid growth. Companies grew and expanded, including their needs and demands to keep up with the phase of the ever-dynamic consumer market. As new products and marketing concepts emerged, the industry saw the need to look for ways to best maximize their time and resources. Hence, the growth of the business outsourcing sector. 

Here are some of the main types of business outsourcing processes. 

Information Technology Related Services

Common types of a workforce that fall under this service include IT analysts, service desk analysts, production support, web developer, web designer, etc. The critical role of IT-related services is to take care of the leading company’s IT needs, including software development, support, security, and maintenance.  

Project Outsourcing

This is where website and marketing companies belong. When a company has a project they cannot handle or doesn’t have the skill or technology available, they’d go the outsourcing route and hire a third-party service provider to take over and manage the project for them. For instance, the company is about to launch its website as part of its marketing plan, but they don’t have the time and talent to make one. They’d outsource this project to a digital marketing company to handle all aspects of this undertaking, including website creation, content, and marketing. 

Orange Digital Technologies is an example of a digital marketing company that provides the online solutions that businesses need, including website creation and marketing.  

Knowledge Process Outsourcing

This outsourcing typically includes hiring qualified third-party subject matter experts (SMEs). Knowledge Process Outsourcing (KPO) is often differentiated from IT-related services because the IT field is more specific toward internet and software-related work. Anything outside of IT is tagged under KPO. Some examples of KPO include research and development (R&D), financial consultants, business operations, investment, technical analysis, legal, medical, healthcare, data analysis, education, and so on. 

Legal Process Outsourcing (LPO)

This specific type of outsourcing covers the legal field or the practice of law. Outsourced legal services could include drafting and creating legal agreements, patent applications, pleadings and briefs, document and contract review, and legal research. 

Key Learnings

In this day and age, business outsourcing is considered essential in any business or marketing strategy. The core consideration of the process is that it’ll enable business savings by significantly reducing labor costs and also help broaden the business’s reach by going global in its resources. 

Everything comes with a risk, and business outsourcing is a risky venture. But then, only those who take a chance will be able to attain real success.   

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