Skip to main content

Outsourcing in the new era


Outsourcing is the contracting of a company’s specific function or functions to another or other companies for the purpose of efficiency or fast delivery of services. Most a times, the function been outsourced to another organisation is considered non-core function of the contracting company.
Though outsourcing has been in operation as long as the work environment existed, recently, companies embrace the outsourcing model more to carry out narrow functions, like billing, order processing, data entry etc. These processes are considered to be done more effectively, efficiently and less costly by contractors who may be considered to have more specialised personnel, tools and facilities.
Outsourcing takes many forms; organizations still hire service providers to handle a single business process but some organizations outsource whole operations. The most common forms of operations where organisations outsourced wholly are information technology and business process outsourcing. Business process outsourcing includes human resources, finance/accounting, as well as claims processing outsourcing. These outsourcing relationship involve multi-year contracts. Most frequently, the people performing the work internally for the client organisations are transferred into the workforce of the service provider.
Even though this has enhanced the process of globalisation and dysfunctional transactions organisations are striving for, organisations should consider whether they should go for a short-term or long-term relationship in their bid to outsource.
More organisations are outsourcing many of the tasks that are necessary to their business and thus giving them more time to work on development and expansion.  This is a process that requires time for stability. Therefore, organisations going into outsourcing should seek long-term relationship than short-term as it would give them more time to focus on the key developmental issues and expansion programmes. There are several advantages to outsourcing; when an organisation outsource, it essentially create more time for itself to concentrate more on its present strategy as can be seen in the case of telecommunication companies operating the country. 
The telecommunication companies offering mobile (data, voice and video) services in the Nigerian business environment their bid to provide quality services as well as capture the highest market share in the outsource the production of recharge cards to other companies to handle. Rather than involved into the production of recharge cards, these companies concentrated on gaining more market share than having divided attention. The ideal has paid off as these companies are competing favourably with revenue running into millions of dollars on a monthly basis.

Comments

Popular posts from this blog

INTERNAL PROMOTION AND SUCCESSION PLANNING

Promotion comes as a result of ones performance on the job over a period of time, or it could be said to be an advancement in ones profession. Succession on the other hand is a shift in position as a result of promotion, transfer, retirement or death of others. It could be as well a change in policy of an organisation leading to reorganisation of operations and human resources. Getting succession right is vital. There are two approaches that can be used at different times to ensure success. The internal selection approach advocates choosing successors from within, to ensure a smooth transition, preserve company values, and encourage employees by showing a potential career path. Most organisations struggle with how to turn succession into success. It is necessary to use either internal selection or the Darwinian approach at different levels or at different times. For example, a high percentage (80%) of senior roles may be internally appointed, while junior roles are sel...

GREEDY PEOPLE, POOR NATION

A holy man was having a conversation with the Lord one day and said, 'Lord, I would like to know what Heaven and Hell are like. The Lord led the holy man to two doors. He opened one of the doors and the holy man looked in.  In the middle of the room was a large round table.  In the middle of the table was a large pot of stew, which smelled delicious and made the holy man's mouth water. The people sitting around the table were thin and sickly.  They appeared to be famished.  They were holding spoons with very long handles that were strapped to their arms and each found it possible to reach into the pot of stew and take a spoonful.  But because the handle was longer than their arms, they could not get the spoons back into their mouths. The holy man shuddered at the sight of their misery and suffering. The Lord said, 'You have seen Hell.' They went to the next room and opened the door.  It was exactly the same as the first one.  There was the la...

Reasons for most Business Failures

There has been rampant cases of business failures both in the past and at present.  One wondered what is behind this.  Some even make assertions that the business world has collapsed, some says businessmen has joined the political wagon that they have failed to differentiate between business capital and profit. All these assertions have no basis.  You may ask what then has been behind most business failures?  The answer to this question is simple “poor customer relations”. One of the single greatest key to long-term business success can be summed up in three simple words: Quality customer service. Yet as customers, you and I are aware that quality customer service is far too rare these days in spite that many business organisations have invested heavily in this unit but few actually make any headway.  Why is excellent service so rare? There are three reasons for this.             Employees don’t know t...