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What is Outsourcing?

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Outsourcing is the act of delegating or contracting tasks to an external third party. In most cases, tasks are outsourced to save time and money, or to make use of someone else’s expertise. Outsourcing comes in all sorts of forms, and businesses of all shapes and sizes make use of the benefits of outsourcing. You might outsource the upkeep of your office to a cleaner, or the manufacturing of products to a factory overseas, or elements of customer service to an offshore call centre.

Outsourcing is a broad catch-all and isn’t just sending jobs overseas for cheaper labour, though that is sometimes the case. Outsourcing is used to keep businesses productive and efficient in a globalized economy so it’s important to understand how it can be utilised effectively within your business to provide value for your company.

What is Business Process Outsourcing?

Business process outsourcing (BPO) is a form of outsourcing which focuses on operational activities and business processes such as administration, HR, customer service, sales, marketing, payment processing, etc.

BPO enables you to offload operational tasks to a third party so that, as the business owner, you can keep your focus on developing and improving your core competencies.

Benefits of Outsourcing

Reduce costs

One of the biggest advantages that outsourcing can bring to your business is reduced costs. Not only can you find cheaper labour overseas, but when you are outsourcing for those jobs, you only pay for the time that is used.

Increased flexibility

When outsourcing, you gain more flexibility than handling everything in-house. Outsourcing enables you to act faster on tasks, with experts at your fingertips, and scale the hours of work and the size of your team much faster than if you were to take on staff as your own employees.

Focus on core competencies

By delegating jobs to dedicated outsourcers, you get back the time you would otherwise be spending on processing tasks. This allows you to focus on your core competencies, be they improving your product/service offering or growing your business.

Improved efficiency on non-core competencies

While operational processes might not be your expertise, they are the expertise of your outsourced talent and outsourcing provider. Not only are you getting reduced costs and increased flexibility around process tasks, but you’re also getting better quality outputs from professionals who are experts in the function that you’re asking for.

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