The evolution of business throughout the history has different methods and its examples, which helped many business persons to build their empires and increase the popularity to the skies. Not everybody is lucky enough to be born like Donald Trump, and start his business with a firm help. Moreover, who wants to use methods of famous gangster Al Capone, terrifying people around and protecting everything what related to his business. The progress is inexorable, that is why nowadays many companies trying to find something new in order to sustain their existence on the world market. The most popular method used by giants of business, is definitely outsourcing. How to use it correctly and does it have positive sides? Let’s find out together.
The nature of outsourcing
To be honest, you can learn about outsourcing every day something new and the information of this method is very wide. Outsourcing is very popular practice among companies, when they are trying to reduce costs by transferring some aspects of work to the different, mostly to outside or foreign suppliers to save their resources. If this method, or it is better to say practice, is used correctly – it may transform to the effective cost-having strategy of any company. According to the final reports, it brings more benefits by buying goods from other companies instead of producing the good internally. Outsourcing is a great and complex process, so mainly company use the best sort of it – business process outsourcing, BPO. In terms of BPO, the companies give their outsourcers not just concrete and directed tasks, but open the access to the field of their business. In the end, they have many benefits, including cost savings and a perfect outsourcing strategy for their business, focused on the main aspects. Companies may use outsourcing in various directions, but it always gives the same result and the financial progress.
Examples of outsourcing
If you go through the history of every rich and famous company, you may notice the one common thing – the usage of outsourcing practice. Even though, most of them did not jump into this long-term process immediately, eventually the main course of the company’s strategy was redirected to outsourcing. There is no need to dive and search the perfect examples of this popular method. General Motors, the most famous company in the car industry using the outsourcing method at least for the last 90 years. They were far behind their main rivals, Ford, but later, they decided to change something in order to grow. The outsourcing practice was used in management and production systems. Nevertheless, not only this time, they show how perfectly it may work. Later, in 1980s, they understood that the budget spent for computer communication system did not work out. This one example goes more under the IT-outsourcing. GM decided to purchase the oldest american provider of communication system services and allowed them to complete orders from different companies. That boosted the whole process of GM’s production, and even the provider (Electronic Data Systems) later became an independent and successful company, having tons of clients and billions of dollars. Nowadays they are able to offer their service to different organizations without any problem.
The practice is basically a win-win situation, and many companies are looking forward to use it and become the best in their field of business. Especially in the US, where even professional economists, like Artur Laffer, positively think about outsourcing: “And just remember — every dollar we spend on outsourcing is spent on U.S. goods or invested back in the U.S. market”©
Still have doubts about outsourcing?
If you do not think that outsourcing is the best way for your business, you may consider few advantages of this method:
- the independency from your main workers (outsourcers will do their job);
- the big production process (the workers of outsourcing side will make everything effectively no matter what);
- confidentiality (the full responsibility is on outsourcer’s side);
- high privacy (your information is protected);
- troubles with equipment (no need to invest in new equipment, since it is a duty of outsourcer).
Of course, the outsourcing practice as everything in this world is not perfect and has its disadvantages. Mainly, the biggest problem companies may face is the long process of negotiations and preparation of documents. However, it is not big deal if businesspersons are professionals and capable enough to handle such problems.
Therefore, combining the best parts about outsourcing, this is fair to say that it perfectly works. You only need to go through the whole process and prepare yourself for any challenges. This is how you can survive in the cold and cruel world of business. Make the right decision and begin your path.