Outsourcing:
Sourcing out non-core functionalities of an organization to service providers who specialize in the segment is outsourcing.
This concept is so prevalent that most of the companies thrive on this simple process of non-core function sourcing. Ex: HR outsourcing/payroll processing.
This function helps companies concentrate on their core of the business and contract out specialized job functions to service providers who carry out the non-core function based on the contract requirement.
A call center is the advent of the outsourcing.
Ex: Some of the American banks outsource their customer service centers and personnel to India. Here, the agents are trained to speak the American accent so that communication is clear and to relate the ambience of being spoken to an American and not an Indian.
Various other segments of the industry have sprung up to create HR outsourcing and payroll processing, Realities Outsourcing, Sales and Marketing outsourcing and the list could go on.
India has an abundant English speaking knowledgeable cost effective crowd which gave the country its recognition of the premier ITES Service provider.
In due course of time, the need to manage non-core functionalities cost effectively and efficiently led to the Industry called Business Process Outsourcing(BPO).
Not all BPO are call centers as it is considered by most. A call center in a figment process of BPO and not vice-versa.
There are a numerous examples of such companies. Let’s take the most sort after segment, ad agencies. Their core is to provide advertisement services to the companies who have contracts with whom market positioning the products they deal with. The companies who strike a deal with the ad agencies do have the expertise to manage and coordinate in-house advertising of the products for reasons like cost, time, and efficiency.
In fact the age old system of auditing is one such long lasting non-core outsourcing by companies. The auditor has the expertise to audit the financial transactions of the company to display in what direction the company is heading financially and tactfully manage the finances.
Advantages of outsourcing:
cost effective
manage non-core functions efficiently
enables the top management to concentrate on the core expertise and constantly improve to the changing needs of their industry.
Disadvantages:
Security concerns might spring up.
One technical fault can cause catastrophic business concerns
Can lead to unemployment in the country that’s outsourcing