Due to the rise of startups in the era of digital technologies and as a result of the specific needs within companies, added to the costs and efforts involved in “hunting” new talent, in recent years Outsourcing was born as a response.
This resource has become very popular among companies of any size and specialty, because by outsourcing some tasks and activities, state-of-the-art technological alternatives have been found with considerable savings.
But, let’s start at the beginning: defining the concept of Outsourcing.
What is Outsourcing?
This is the process by which a company and/or organization identifies a process within its routine that could increase productivity and lead to optimization, involving third parties that are outsourced to perform that task or activity.
In other words, it consists of delegating some functions to a company or team specialized in them, to increase production, access better technologies or lower costs within the organization.
Tasks range from facility maintenance to complex and meticulous processes like accounting or talent recruitment.
What is Outsourcing used for?
Generally speaking, Outsourcing is a striking alternative for businessmen and entrepreneurs when they are seeking to reduce their expenses in routine operations to produce greater profitability.
If we use marketing as an example, in the case of a nascent advertising and marketing agency, outsourcing graphic design, communication and even accounting services facilitates the tasks, productivity and focus of the staff towards the achievement of the objectives of the organization. .
However, this option is also viable when companies need access to world-class technologies and capabilities at a time when their finances do not allow them to acquire them.
What are the advantages and disadvantages of Outsourcing?
As every story has two versions, Outsourcing has its benefits but also its possible drawbacks. Here we show them:
- reduction of spending on manufacturing, salaries, investment and equipment or machinery;
- timely and effective response to environmental change;
- strengthening of company processes;
- construction of business and corporate relationships;
- diffusion of a new and better image of the organization;
- head-to-head competition with other companies in the sector with better technologies and greater reach;
- familiarization with new technologies;
- optimization of delivery times and quality, which favors organizational development;
- obtaining accurate data to optimize decisions;
- access to better technological resources without the need to train staff;
- availability of information services in a timely manner;
- application of talents and resources in strategic sectors of the company;
- flexibility within the organization and reduction in fixed costs.
- dependency on third parties as far as innovation is concerned;
- loss of direct contact with new technologies and methods available to improve processes;
- delivery of recipes and techniques to other companies that can use them to plant competition;
- the lack of planning in the Outsourcing process can cause cost reduction not to be as positive as expected;
- problems, costs and delays in case the service provider cannot take care of some process and another has to be found;
- reduction of control and benefits in the process of delivering products and services.
Now, knowing the pros and cons of acquiring Outsourcing services in a company, it is important to talk about the different types that exist, according to the needs of your company.
Don’t walk away!
What types of Outsourcing exist?
In general terms, it is a simple subcontracting to carry out a specific task and not so essential for the company. Their main motive is cost reduction.
Here we already talked about fostering a very close and stable relationship with a third party.
They are strategic alliances that take shape according to the codependency that exists between the task and the other functions of the organization. They are sought after to improve the quality or capacity of the company.
In this scenario, both organizations share responsibilities and the risks that exist in the provision of the service. That is, there is a partnership relationship between organizations.
It is only in cases where the Outsourcing service is performed within the facilities of the company requesting it.
Do you know the name given when a company hires a foreign company to handle tasks or manufacture its products? You guessed it! Yes, it is offshoring.
This is because the foreign company can offer lower management or production costs than the national ones. If China comes to you as an example, you are correct!
It is called the services that are executed within the facilities of the companies that provide the service and are then distributed directly to the consumer from that place.
You already know the types, so it’s time for you to understand the scope of Outsourcing in the technological age.
What is the scenario of Outsourcing in Mexico?
In Mexico, companies also use outsourcing to simplify human resource management and, more than anything, to reduce time and, above all, costs. This modality is legally recognized, since it is part of the Federal Labor Law since December 2012.
According to the World Employment Confederation, also known by its English acronym WEC, in April 2019 there were more than 900 companies in the country that were engaged in subcontractingbeing that only 100 of them were registered with the Mexican Institute of Social Security (IMSS)
However, the Ministry of Labor and Social Welfare (STPS) indicated that it has the registry of 304 branches in 26 states of the country.
Despite not having a clear figure, there is no doubt that many Mexican companies use Outsourcing for tax evasion, failing to comply with their obligations to workers.
Today, with the reform to article 15 of the Federal Labor Law, in what refers to Outsourcing, there will be greater control and supervision of the activities of the organizations that act with this modality.
What is the impact of Outsourcing in the digital age?
When we talk about digital transformation, it is not only necessary to recognize the needs that a company has in terms of technology and identify the ideal tools to satisfy them, it is also important to be clear about the possibilities that open up when we consider Outsourcing for this task.
We can guarantee that, among the technological services necessary to start a process of digital transformation, Outsourcing is the first and most important stepsince it greatly facilitates growth, familiarization with technology and investment management for your company.
A clear example of the impact of Outsourcing in the digital age is the possibility of migrating tasks, applications, processes and information to cloud services, which allow access to comprehensive market solution capabilities and technologies at low costs.
Outsourcing emerges today as a solution and tool so that many companies, small or large, can delegate vital and non-vital functions in order to improve their productivity, increase profitability and gain experience in technological and management fields unexplored until now by them. .
Every entrepreneur or businessperson should consider this path in at least one process within their company, not only because it brings undeniable benefits in financial terms, but also because it leads to cooperation with other companies.
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