Choose The Right
Which Is The Best Example Of Outsourcing
Legal Services
Suppose your venture isn’t in the habit of breaking the law. Is it necessary to have a permanent lawyer on staff? Not really! Sign a contract with a law firm, get the qualified legal aid you need, and pay only to solve your legal issue. Law offices’ different aspects of business legal support in their outsourcing services range from labor, tax law, and corporate and legal consent in court. International law firms also help enterprises with foreign economic activity and exchange regulations.
Accounting
Did you know that in most companies, the financial side is one of the most complicated aspects of business processes? Accounting outsourcing entails the transfer of an organization’s functions and bookkeeping. In most cases, the volume and nature of the required services dictate the principles of interactions between your company and the outsourcer.
The outsourcer must be knowledgeable and experienced in the accounting sphere to achieve the goal of managing multiple business processes simultaneously. Transferring accounting functions to a third-party company allows organizations to save significantly on staff salaries, taxes, and installing and updating accounting software.
Personnel Outsourcing
To reduce the costs of worker salaries, business owners opt for personnel outsourcing. Although the hired workforce is part of a third-party team, the authority to assign tasks to them also vests in you. Personnel outsourcing entails recruiting firms specializing in the search and selection of personnel. Therefore, they help the hiring company find a highly qualified employee in the shortest time possible. Unlike personnel outstaffing, personnel outsourcing requires that the outsourcer research the labor market while following the latest supply and demand trends for specific jobs.
Outsourcing In Production
Think of a famous brand like Nokia. Being a Finnish company means that most of the company’s products, like Nokia phones, are manufactured in Finland. But did you know that not all Nokia products are manufactured in Finland? Nokia manufactures its devices everywhere, including in Mexico, Hong Kong, Germany, China, Brazil, and more.
Huge companies with large production capacities actively use outsourcing in production. For example, all the global brands in the automotive industry transfer several functions to highly specialized and experienced third parties. That also includes technology and telecommunication enterprises and energy companies.
Logistics Outsourcing
Logistics outsourcing came to ease the burden of enterprises having to invest a lot in preparing and maintaining a large staff for coordinating transport and warehouse processes. Today’s businesses no longer need to maintain a special transport department since logistics companies take care of that. These third-party companies can deliver your goods throughout the globe.
The advantage is that leveraging this opportunity reduces costs while simplifying business process management. And that’s not all! Logistic firms can offer both transportation services and stock storage, meaning it saves business owners the hassle of searching and renting/leasing warehouses and worrying about the safety of their products.
Knowledge Process Outsourcing
The United States of America is the first country to start embracing knowledge process outsourcing (KPO). It is a new direction that most parts of the world are not yet familiar with but is critical in managing companies’ processes that need comprehensive study and detailed analysis. This means that outsourcing companies in this field form a knowledge database responsible for managing it.
While the outsourcer could be in the same country or another, workers of various firms or divisions of a large business carry out the knowledge and information work.
It Outsourcing Market Overview
Over the past couple of years, the universal tech talent scarcity has significantly contributed to outsourcing becoming an increasingly appealing alternative for businesses. It is the ideal solution for lowering software development costs and overcoming the challenge of finding qualified professionals, among other issues. The emergence of the COVID-19 pandemic led to a tremendous increase in remote work. According to Bryan Robinson (3),
“Remote opportunities leaped from under 4% of all high paying jobs before the pandemic to about 9% at the end of 2020, and to more than 15% today.”
-Forbes
Experts project that remote employees may account for approximately 52% of the U.S. workforce by 2022. Today, around 65% of all successful businesses and organizations integrate outsourcing into their model. According to a CNBC report, a Harvard professor found that outsourcing chores could make people as happy as getting a raise of $18,000. (4) That finding explains why Dutch firms would offshore IT talent to offer excellent team scaling flexibility and save money.
Within the outsourcing model they’re various types like onshore, offshore, and nearshore. All of these terms revolve around where your staff is being sourced. Now, in recent year nearshoring has quickly become the preferred method in the industry. Why? Well common time zones, language and cultural similarities just to name a few. But to figure out why nearshore outscoring is important we dug deeper and wrote an entire detailed article about it.Click to learn more.
Which Is The Best Example Of Outsourcing? – 7 Case Studies
The following are seven successful outsourcing examples of how companies collaborate with outsourcing teams to develop their operations and gain a competitive advantage in the global market.
Slack
After engaging the Canadian design company MetaLab, Slack outpaced the competition in the international market after getting the help it needed to grow the beta version into a popular product. 2017 saw Slack secure a $250 million investment worth $5 billion via online outsourcing logo or website design.
Having little startup funding, WhatsApp needed to maintain low operating costs. So, it reached out to Eastern Europe to help with the technical ability to develop and promote its product. Today, the corporation hires Russia’s offshore software developers because of what it terms the country’s sound engineers. The overseas personnel handled development, while most internal personnel focused on customer service and operations.
Skype
After realizing that product development was not the most critical factor in Skype’s success, the company located the necessary abilities and expertise at a reasonable cost. This move helped Skype to keep developing the online program and keep prices down. The company looked to Estonia, sourced talent, and hired many developers. With time, these hired developers exhibited success, and the firm absorbed them as partners. Skype’s top reasons for outsourcing included capacity concerns, cost reductions, and access to unlimited abilities and talents.
Thanks to outsourcing, Google has grown into a giant technological corporation from a basic search engine. The company has been among the largest outsourcers for decades for outsourcing non-core tasks, including administration and IT labor. Since it recognizes that it cannot accomplish everything despite its scale, the corporation has listed its primary reasons for outsourcing. They include addressing capacity challenges, lowering prices, accessing a pool of abilities and talents, and boosting quality.
Alibaba
Like Amazon and eBay, Alibaba is an online eCommerce that has risen to prominence primarily due to outsourcing. Since Alibaba was already in China, a lower-cost nation, the paradigm for outsourcing transformed, and this time it was not for financial reasons. The company could keep local manufacturing and resource costs low, but unfortunately, the talents needed for growth were not accessible at scale within the country’s borders. Therefore, the now online eCommerce giant reached out to outsourcers and partners from the U.S. The site outsourced web development to the U.S. and subsequently blossomed.
Basecamp
Recognizing that trying to execute every task on their own was not a good strategy was the first step toward Basecamp’s success. The project management platform realized that the level of internal workflow and client support issues they were experiencing was alarming. Therefore, Basecamp outsourced some vital operations to allow its employees to focus on core business to address this problem. The company kept improving the app using remote developers. At the same time, the firm’s in-house workers concentrated on internal operations and organization, and that’s how everybody came to know Basecamp.
Citigroup
Citigroup began outsourcing its IT operations in 1992, and today, it runs multiple offshore facilities in the Philippines, Poland, and India. And after reportedly cutting around 11,000 employees at the corporation’s headquarters in 2012, remote workers overseas are now performing most of its IT Functions. Additionally, Citigroup has continuing agreements with TATA Consultancy Services, Wipro, and other multiple outsourcing companies.
