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European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 01

January 2019

Available online: https://ejbss.org/ P a g e | 391

A View on – Outsourcing

Poonam Sharma

39 Friends colony, Hisar

Contact no- 9812094646

Email id- ps707216@gmail.com

ABSTRACT:-

Outsourcing has become a major trend in human resources over the past decade. Outsourcing

is often involved contracting out of business activities to an external provider. Outsourcing is

any job, task, process or operation, which could be done by the internal employees of an

organisation, but instead of doing so; such companies contract a third party to perform the task.

In addition, the tasks which are done by the third party may be done off-site or on-site. Some

common areas of this business are marketing services, website creating, analysis and etc.

Outsourcing is a practice usually undertaken by companies as a cost-cutting measure.

KEYWORDS:- Outsourcing, services, organisation, process, driven, cost, employee.

DEFINITION:- The practice of having certain job functions done outside a company instead

of having an in-house department or employee handle them; functions can be outsourced to

either a company or an individual.

INTRODUCTION:-

Most organisation go for some kind or other of outsourcing. Generally it is non-core aspects of

the business that are outsourced. The firms that offer the services thus required are called

service providers or third-party providers and this process of hiring is known as outsourcing.

Businesses may thus tie up with service providers for either individual processes or whole

projects or operations.

REASONS OF OUTSOURCING:-

Global competition is growing fierce and companies are looking for ways to increase their

competitive edge without jeopardising their profit margins. Companies are also realising that

staying current with technologies requires a great deal of effort, risk and expense, this is why

outsourcing is being thought as an attractive alternative.

Some of the main reasons why a company may want to outsource are stated below;

Page 2 of 5

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 01

January 2019

Available online: https://ejbss.org/ P a g e | 392

A) Organisational Driven Reasons:-

The contact a company or organisation takes with the outsourcing firm determines the

amount of the risk the company faces. Outsourcing in this aspect enhances effectiveness by

allowing the outsourcer focus on what he/ she knows how to do best. Increase product and

services value customer satisfaction and share holder value to transform the organisation.

B) Improvement Driven Reasons:-

One of the strategic initiatives of an outsourcing firm is to stay current with new

technologies and system. In this aspect outsourcing helps the company to;

1. Acquire initiatives ideas

2. Improve in the operating performance

3. Improve credibility and image by associating with superior providers

C) Cost Driven Reasons:-

In this aspect there are many reasons why a company will want to save cost; some of these

Reasons are stated below;

1. size of the staff in the company

2. The company size at a whole

3. Hardware and software maintenance agreement, etc.

4. Strategic direction of the company

One of the primary reasons why a company will want to save is the ability to take advantage

of economies of scale. Outsourcing firms are able to consolidate data centre operations, which

provides lower overhead cost on a per-customer basis. Outsourcing firms acts as aggregator for

telecommunication networking and cost reduction.

D) Revenue Driven Reasons:-

Through outsourcing, a company gain market access and business opportunities

through the provider’s network. Provides flexibility needed to stabilize the various

demands needed by the company. The sales and production capacity are expanded

during period when such expansions could not be financed in the company. Outsourcing

accelerates expansion by tapping into the provider’s developed capacity, process and

systems. It gives rooms for exploiting the skills commercially. All this leads to the

improvement of the company.

E) Employee Driven Reasons:-

Page 3 of 5

European Journal of Business &

Social Sciences

Available at https://ejbss.org/

ISSN: 2235-767X

Volume 07 Issue 01

January 2019

Available online: https://ejbss.org/ P a g e | 393

Outsourcing give employees a stronger career path, they get to know what they are

good in and then with the knowledge that they know what they can do, makes them to

be committed and energy in non-core area.

It provides the ability for an employee core to focus on the core business, most

necessary and peripheral operations are outsourced and this gives the employees an

ability to concentrate instead of getting disturbed by minor issues.

ADVANTAGE AND DISADVANTAGES OF OUTSOURCING:-

Advantage of outsourcing:-

1. High cost savings:-

You can save a lot of money when you are only paying for services provided. Not to mention,

you don’t have to fork out additional cash for benefits and incentives.

2. Reduces overhead costs:-

When you hire an outside firm or a freelancer to handle professional services, you don’t have

to worry about overhead costs like additional office space, office supplies, computers, and

more. This significantly reduces your expenses.

3. Global access to talent:-

Let’s say your office is located in a smaller town where you don’t have access to a top lawyer,

accountant or IT professional. You don’t want to risk hiring someone with mediocre skills just

so they can come to the office every day. Instead, hire the best of the best and let them work

remotely.

4. Ease of employment handling:-

If things don’t go as planned, it’s easier to let a contract worker go than it is to let an in-house

employee go. Not to mention, you can quickly fill the position with a better fit when you are

able to cast a wider net.

5. Efficiency:-

A company that focuses solely on manufacturing has all the details worked out already. You

can count on production running smoothly and products getting delivered in a timely manner.