Business experts believe that properly organized outsourcing leads to fantastic results. But this rule is not relevant for every case. Features of the service, nuances of use, advantages and disadvantages deserve special attention.
Business process outsourcing: advantages and disadvantages
First of all, you should understand the terminology, since the word "outsourcing" in the domestic business sector appeared relatively recently. Translated literally, it means "attracting third-party resources." From the context it is clear that we are talking about attracting human resources to the activities of the company in order to improve or maintain the current level of efficiency.
Outsourcing as a business tool is not particularly common in Russia. According to economists, it is too early to draw conclusions, since the potential of this industry is practically not revealed. You can compare with European and Western countries, where medium and small-sized companies give about 80% of internal processes for external management. There are several good reasons for this. But we can’t say that outsourcing of business processes promises continuous benefits. It will also discuss the disadvantages of this approach. But first things first.
What does the process look like?
In order to understand the essence of the process, it is necessary to clearly imagine the anatomy of the phenomenon. Using the services of external specialists belongs to the category of B2B services - providing services to companies and private entrepreneurs. Therefore, first of all, the customer company signs an agreement with an outsourcing company. It will indicate the procedure for cooperation.
Outsourcing services, in fact, are a group of “incoming” specialists. The Contractor may be a legal entity, a private entrepreneur or a specialist having a different permission to conduct commercial activities. For clients of an outsourcing specialist, it’s important not the form of activity, but the experience of the contractor, as well as the potential benefits that he can count on. Objectively, outsourcing business processes can guarantee some significant benefits.
Expert opinion
Commercial activity is interesting in that at each stage it provides an opportunity to confirm or refute a particular theory. For example, the chosen method of tax or accounting may be correct and will help save money or, conversely, increase costs.
The second outcome is likely if the company's accountant or a good adviser to the manager “forgot” to take into account a small change in tax legislation. And the costs should be covered by the company. The leader, being confident that his business is being run by specialists, may not be aware of what opportunities are being missed.
The strength of a specialist is proportional to the number of complex tasks that he was able to successfully solve and show specific results. For this, another condition is necessary - the dynamism of the general processes in the company. Outsourcing services perfectly provide their specialists with such conditions, since each client is a new difficult task.
As a result, in a short time, experts gain invaluable experience and already have in their arsenal several ready-made solutions for each critical case.
Process Acceleration
Psychologists note this effect: the less responsibilities an employee has, the faster he loses motivation to work, and vice versa. The manager can hire a good specialist, assign him a solid salary and social package. But he will be indignant that very soon the specialist will begin to disrupt the terms of work, show low efficiency and generally a negative trend.
The reason is not that the employee is not good enough, but the small amount of work that is not able to create the effect of dynamic growth. At the same time, the same employee, but working in an outsourcing company, simultaneously leads the affairs of several companies and shows success. If a manager turns to this company, his company’s affairs will also be quickly done, and wages may be lower than the content of a staff member.
Risk reduction
An important factor in any business is an objective analysis and assessment of risks. In fact, there are few such companies where each employee is responsible for the results of their work. The usual practice for companies: there is success - the issuance of bonuses, failure ends with a reprimand or loss of bonuses.
Another situation, when a specialist bears equal responsibility together with a manager, then his work efficiency increases greatly. The explanation of such manifestations of cooperation lies more in the plane of psychological sciences than in practical explanations. In any case, it is an indisputable fact that outsourcing of the company will be justified on this point.
Cost reduction
This item is especially relevant for beginners and small companies. In such offices, the amount of work for one specialist may be small. For example, an entrepreneur cannot do without the services of a lawyer, but hiring a specialist with a higher legal education and full-time experience can cost him a substantial amount.
Outsourcing of business processes, in particular, transferring certain types of work to external management, will help to significantly reduce costs. An entrepreneur can contact a remote employee only for a specific job and make payment according to its volume.
If we are talking about a medium-sized company, then it can also significantly reduce costs. In such companies, it is usually customary to maintain entire departments in different areas of activity. Usually, after a thorough HR audit, it becomes clear that part of the department can be immediately reduced, and the company only benefits from this. Outsourcing a company and some of its tasks can provide brilliant results at a low cost of services.
Unique features
There are no boundaries for business prospects. This phrase will be true and literally. The whole world knows that in some parts of the world labor is valued very expensively, in others it costs a penny. This applies to all types of labor: highly skilled, mental and intellectual.
The Internet has made it possible to combine such conditions. Each of the parties gets its own benefit: a specialist finds a job with decent pay, and an entrepreneur finds a specialist with good qualifications. Outsourcing of business processes is quite possible via the Internet. Depending on the type of activity, it is possible to organize work so that the business operates around the clock and around the world.
Labor facilitation
Using the services of wage workers creates a considerable number of obligations. To manage this aspect, there is a need to create an HR department. This is a problem for large companies.
Small ones also have their own difficulties. They may not have an HR department. But in small teams, as practice shows, it is difficult to observe subordination. And this has a very negative effect on work efficiency. Personnel in the outsourcing of business processes, in principle, are not able to undergo the phenomena that usually occur within the company. The essence of all relations here comes down to the terms of the service contract.
You can safely plan
About the separation of risks and responsibilities have already been mentioned. Relying on the experience and knowledge of the performers, the entrepreneur can now plan more risky projects and solutions. It is enough to notify their performers about this. The possibility of experimentation opens up previously unseen prospects and opportunities for business.
Peace and predictability
It is difficult to do business when it becomes the cause of insomnia, takes away health and peace of mind. The time will come when the entrepreneur can no longer find the strength in himself to continue the business. The functions of outsourcing business processes are to simplify the conduct of business to the highest possible level.
If the specialist is good, then there is no need to worry about the fact that competitors can take him away. There is no need to verify each step with the TC, monitor discipline, demand results and achieve their high price. All these problems lie on the shoulders of the outsourcing company, which under the contract is responsible for its customers.
disadvantages
There are a number of disadvantages that an entrepreneur must consider. For instance:
- Lack of control. It is about monitoring the implementation of tasks. This risk is great when working outsourcing with other countries. The customer does not know who exactly performs his work, how and what the exact result will be.
- Information leak. In the course of work, the remote employee will gain access to the company's affairs, as well as its important data. In the contract for the provision of services, security must take a special place. Companies guarantee information security. But it will be useful to ask for additional confidentiality measures in the contract.
- Dependence on another company. Too close cooperation with another company can put the customer's affairs in a dependent position. In order to prevent the concentration of all forces in one hand, it is recommended to use the services of different companies or slightly reduce the share of outsourcing cases.
What can be outsourced?
Given all the advantages and disadvantages, the question arises as to which business processes should be outsourced and which should not. Today, the following types of business processes at a distance are practiced.
- Accounting.
- Auditing services.
- Lawyer services.
- Outsourcing of business processes in supply.
- Sales department.
- PR department.
- Printing processes.
- Cleaning part.
- Services of loaders.
- Outsourcing of business processes in advertising.
- Translation Services
- Responsibilities of the HR department.
This is an incomplete list of what can be assigned to remote employees. Much depends on the scope of the company and on the specifics of the work. Thanks to the broad capabilities of the Internet, you can find any specialist with a narrow focus and at the price that suits both parties.