Strategic Management
Outsourcing Today (B)
The trend of increasing of outsourcing scale and diversity is constantly increasing, despite the global crisis. Learn about outsourcing types and their advantages versus in sourced activities.
Posted: Feb 2012
Global economy recession reduced the scale of economic activities during the past years. One segment continued to grow despite of the crisis – the Outsourcing. Cost reduction and efficiency increase became the imperative in every business branch. This factor helped to outsourcing concept to grow and expand to new areas.
The range of outsourcing services is growing every day. The companies are trying to outsource repetitive jobs and to focus on development and innovation activities.
This gave the opportunity to the outsourcing services companies to find their cut. Simply, obtaining relatively simple business activities in an extensive amount of transactions gave them opportunity to increase activity and to become process and cost efficient compared to the companies that normally deal with full range of activities. Here is the list of some outsourcing services.
Co-sourcing
This term represent business activity where certain service is done by both internal and external workers. There are two types of co-sourcing. In first case the company is engaging external agency when they lack the expert that is supposed to cover specific field within process. In second case in situation of increase of business activity beyond regular capacity, the company is engaging external support.
Legal Process Outsourcing
The legal outsourcing is common among small and mid size companies, who can not afford to have full time legal department for purpose of handling of occasional legal issues. Simply a layer of external legal team is engaged based on demand.
Homesourcing
This type of outsourcing represents transfer of business activity to the home of employee. The homesourcing links employee with business process through technology such as phone, mail, internet or other modern technology. Initially homesourcing used to cover simple business tasks. Later it evolved to other, more complex services, such as accounting. The advantage of homesourcing lies in no office costs, and much lower utility costs, since they are shared with home costs.
Knowledge process outsourcing
This type of outsourcing uses the experience of external consultants, for activities that are not related to regular process activities, such as production. Instead, external consultants do expert services in decision making and strategy building area.
Sometimes knowledge process outsourcing is based on engagement of foreign experts, with purpose of sharing of experiences form different markets.
Farmsourcing
This type of outsourcing has nothing to do with farming. It means that some business activity is moved to rural area, due to simplicity of process and relatively lower process costs.
Since the concentration of the companies is in the big centers, due to infrastructure, market and other reasons, the work power cost more, due to higher competitiveness of companies that looks for skilled employees. On other side, the rural parts of the countries have cheaper man power, due to lower demand for work force.
