Updated: 06/04/22
What is outsourcing? Advantages of outsourcing services
For some years now, outsourcing has been a powerful tool increasingly used by companies of all sectors and sizes to increase their profitability and efficiency. The outsourcing is an Anglo-Saxon term that could be understood in our language as subcontracting, externalisation or outsourcing. But what exactly is outsourcing and what is it for? In this post we tell you some of the things you should know about this useful tool.
What is outsourcing?
Outsourcing is the recruitment by a company of a external supplier to perform a certain process or task. In other words, it is a process that consists of delegating a specific function, usually complementary, to another external company specialised in this task, which allows the company that hires it to reduce its workload and focus its efforts and resources on the main activity of the business, substantially improving productivity and reducing costs. In short, it achieves a better overall performance of the company.
Areas in which outsourcing is most used
The areas of a company in which outsourcing is most commonly applied, delegating certain tasks to companies that are experts in these areas, are in the area of Human Resources, the administrative area, the commercial area, IT services and in secondary activities such as maintenance and cleaning or logistics and transport services.
Advantages of outsourcing
Delegating the performance of certain company activities to a specialised external company or provider offers a number of advantages, some of which are listed below:
Cost reduction
The contracting an external provider allows companies to significantly reduce costs by cutting investment costs in new technologies, infrastructure and even in hiring staff to carry out tasks that are not the organisation's main tasks.
Improved performance in the core business
Al no have to investing financial and human resources in areas that are not the core business, they focus on the core business. It also saves time and effort in the development of certain projects. This allows the company to improve overall performance and significantly increase productivity while reducing costs.
Higher quality
Conversion of fixed costs into variable costs
Al outsource some specific processes take advantage of the external company's expertise and state-of-the-art technologies for their own benefit, improving delivery times and the quality of the organisation's own product or service.
Outsourcing some services and processes allows you to convert some fixed costs into variable costs, because you pay only for the service you need and when you need it, without having to hire staff, with the consequent payroll and social security costs, or invest in equipment.
Services commonly used by the vast majority of companies such as logistics, security or cleaning services are a clear example of this.
Index
