One of the good ways to increase the efficiency of the work process and achieve greater productivity from personnel is the principle of division of labor. True, not all enterprises can afford to create a large staff of highly specialized specialists, because their salaries are far from small. An excellent alternative is available to such organizations: they can transfer (delegate) some functions that are not of key importance to a representative of another organization. This delegation is the answer to the question of what outsourcing is. In simple words, the process can be described as attracting an outside specialist.

Features of outsourcing

The outsourcing company, which undertakes to carry out these duties, enters into an agreement with the customer company. Long-term cooperation is of interest to both companies, as it is mutually beneficial.

They distinguish between full and partial in simple words:

1. Complete - the outsourcing company assumes the performance of all functions in any area.
2. Partial - the involved employees must carry out only some procedures or activities.

Despite the fact that this concept is relatively new for domestic businessmen, many have already appreciated how convenient and economical outsourcing is. What it is? The following types and examples can be given: hiring a company to fully service an enterprise’s computers is complete outsourcing. At the same time, partial transfer of responsibilities for repairs or monitoring the status of the software is carried out, while other tasks remain with a full-time employee.

What is outsourcing: in simple words about the types of outsourcing

In the course of the activities of modern enterprises, the need for the following types of outsourcing may arise:

• Production involves transferring to another organization the execution of a production task. An example would be most advertising agencies. They entrust the printing of printed products to specialists (banners, flyers).

To save on the purchase of additional equipment and expand their capabilities, it is extremely important for such enterprises to know what outsourcing is. In simple words, this concept can be described as reasonable savings.

• In the IT field, this type of outsourcing involves the involvement of organizations to create websites, maintain equipment that is at the disposal of the customer enterprise, or to develop any type of software with its subsequent support.

A good example is retail chain stores that do not employ programmers on staff, but hire an outsourcing company on a contract basis to create and maintain their websites.

• In the field of business processes, if it is necessary to regularly perform small amounts of work with documents or with personnel, an appropriate outsourcing company is involved. What is this in simple words? This is an accountant, economist or business coach who is not part of the company’s permanent employees. Hired specialists perform work related to payroll, accounting, legal or consulting services, auditing, and personnel selection.

Benefits of outsourcing

Among the advantages of such a phenomenon as outsourcing is the elementary ability of a company to concentrate its efforts on conducting core activities. That is, an enterprise can only engage in its own production without being distracted by secondary tasks (for which specialists are invited).

Also important is significant financial savings. It is due to the fact that it is possible to reduce investments in resources and abandon the training and maintenance of unclaimed employees.

Thus, outsourcing becomes a significant saving factor. What is it in simple words: an invited specialist does the work faster and with better quality. Some businesses report cost reductions of 20%. In addition, new strategic partnership paths open up new opportunities for all participants.

Disadvantages of outsourcing

One of the disadvantages of this type of activity is a certain dependent position in which the customer company finds itself. The occurrence of any difficult situation (economic or production) at a third-party service provider affects the work of their client.

In addition, there may be dissatisfaction on the part of permanent employees of the enterprise, who are forced to make a management decision to outsource. What it is, definition, meaning and features were discussed above, but the human factor was not taken into account. Sometimes incoming employees may be seen as competitors or job applicants.

Also, a significant disadvantage of outsourcing is the need to provide third-party companies with confidential information about the enterprise.

Outsourcing - business

Having understood what outsourcing is (in simple words - delegation), we can consider some aspects of the organization and functioning of an outsourcing enterprise.

According to many owners of their own companies, this type of activity is quite profitable, profitable and promising. In addition, the formation of such a company does not require such large sums of money as a traditional business.

Initial investments are necessary to pay for the rental of premises, paperwork, purchase of office equipment and equipment. Also, an important cost column is the selection and maintenance of qualified personnel and advertising of the newly formed company. Raising invested funds has become a traditional business practice. Entrepreneurs who do not have the required amount to form a company resort to this step.

Investors can be individuals, other enterprises or banking institutions.

Personnel is the main resource of an outsourcing enterprise

Based on the fact that an organization that “rents” its employees receives remuneration for the work they perform, its personnel must be well trained, competent, literate and well versed in their field.

When searching for personnel, applicants are asked to meet the following list of requirements:

What is outsourcing and outstaffing: differences in concepts and terminology

Such seemingly similar concepts actually have a lot in common. However, in practice these are different forms of labor organization and the main differences are listed below:

Conclusion

Thus, we can conclude that a new word and a new concept serves many entrepreneurs in a variety of business areas. To increase production profitability, reduce personnel costs and expand their own horizons, organizations use personnel outsourcing. What it is in simple words can be described with several synonyms: delegation, transfer of responsibilities, involvement of outside specialists.

The concept of outsourcing entered Russian practice only a few years ago, but has already become widespread. The essence of outsourcing comes down to the transfer by a company of certain operations to a third party.

This phenomenon quickly caught on, enterprises appreciated all the advantages of the system, and now there is quite high competition in the market in the field of outsourcing services.

Outsourcing - what is it?

Outsourcing (English outsourcing: out – external, located outside, source – source) is a set of activities aimed at transferring certain processes and functions by an enterprise to another organization. In general, outsourcing is the use of someone else's resources.

Main features of outsourcing

• existence of an agreement on the transfer of functions;
• long-term agreement (more than a year);
• transfer of only non-core (non-core) operations;
• possibility of transferring business processes (accounting, personnel selection, technical maintenance).

What is an outsourcing company

The organization taking over the functions is most often highly specialized, which increases the quality of service and the level of responsibility. Such companies are called outsourcing or outsourcers.

Types of outsourcing

There are many types of outsourcing - almost all non-core activities can be transferred to outsourcing companies.

Accounting

One of the most popular forms of outsourcing is rightfully considered to be the transfer of accounting and reporting at an enterprise to a third-party organization. For the results of the enterprise-customer of services.

Several options for cooperation are possible:

• drawing up reports;
• record keeping;
• full service (everyday accounting, reporting, creation and maintenance of primary documents).

In general, outsourcing of accounting services is a convenient function that allows you not to create an accounting department at the enterprise.

IT outsourcing

IT outsourcing is most widespread all over the world - this is due to the increased use of information technology and high requirements for specialists in this field.

Video - what are the advantages and benefits of IT outsourcing:

Personnel outsourcing

Special recruitment agencies can take on the functions of recruiting personnel, calculating the tax burden associated with wages, calculating bonuses and compensation.

Payroll calculation is much less likely to be the object of outsourcing services.

The recruitment agency is not responsible for the quality of staff work.

Legal

Legal outsourcing is convenient for medium and small companies. A special outsourcing company will provide services on tax and labor law. You can also outsource the reorganization and liquidation of legal entities.

Highly qualified lawyers of outsourcing companies make it possible to completely transfer legal functions. An in-house lawyer will most likely cost more than a third-party specialist, since the workload on a specialist is usually low.

Video about legal outsourcing:

Logistic

The logistics company will take over the functions of storing stocks and finished products and transporting them. All processes related to transportation and warehousing also fall within the competence of the transport company.

Video about the nuances of logistics outsourcing:

Industrial (production)

Production outsourcing is typical for high-tech enterprises. Companies in the technology and telecommunications industries outsource the entire production process to a third party.

As a result, manufacturing costs are reduced, quality and reliability are increased. This way, they can focus on promoting existing products and developing new products.

Advantages

The main advantages of outsourcing include:

• cost reduction;
• staff reduction;
• the ability to concentrate on core activities;
• receiving higher quality services;
• division of responsibility.

You should turn to outsourcing if paying for the services of a third-party company would be more profitable than maintaining your own department. That is, the costs of an outsourcer will be lower than the costs of a full-time employee.

The main advantage of outsourcing is the ability to concentrate on core activities. Thus, part of the non-core functions is transferred to another organization, this allows saving resources that are directed to the development of the enterprise.

Companies that provide outsourcing services offer higher quality work and are responsible for its results. Their narrow specialization allows them to train employees in a timely manner and use advanced technologies, which is also an advantage for the customer enterprise.

Price

The outsourcing company is responsible for all payments related to the employee’s salary: insurance premiums, sick leave, maternity leave, and vacations. Also, in case of temporary downtime, the costs associated with them will also be borne by the outsourcer.

Many outsourcing companies offer discounts for the same amount of work under long-term contracts. Payment for outsourcing services occurs only upon completion of work.

Exists three types of outsourcing payment:

• payment based on results;
• payment according to the hours specified in the contract;
• payment for actual time worked.

Most payment based on results is common– funds are transferred only after receiving a specific quantifiable result, for example, preparation of financial statements.

Pay by the hour specified in the contract is usually used when performing non-standard tasks for which time standards have not been established. In this case, the outsourcing company puts forward a proposal for the completion time, and the customer company agrees to the set time frame.

Payment for actual time worked used, for example, when ordering outsourcing services for hiring personnel. An outsourcing company specialist spends time recruiting personnel. He is not responsible for the subsequent work of the hired employee. He is paid only for the time actually worked.

Outsourcing in Russia

At the moment, in Russia there is already a certain understanding of what outsourcing is. But this, in turn, gave rise to many incorrect stereotypes. Not all enterprises understand that outsourcing is not hiring employees from outside, it is full-fledged cooperation in a specific area.

With the help of outsourcing, it is easier to increase capacity and increase market share. An outsourcing company provides support and full service for a specific process, which means it is easier for the customer company to focus on development.

Some large Russian companies have already appreciated the advantages of outsourcing, especially in the field of IT technologies and personnel selection. Long-term contracts for the transfer of functions allow us to reduce costs year after year.

Another feature of Russian outsourcing is the attitude of managers towards the transfer of functions. It must be remembered that outsourcing is a division of responsibility, and not a complete shift of responsibility to the outsourcer.

Examples

Currently, many world leaders in various industries use the services of outsourcing companies.

A global example of the successful use of outsourcing is IKEA company (IKEA). The company currently uses more than 2,500 third parties to produce its products. The supply chain (logistics service) is also outsourced. All company activities are focused on the main activity - retail sales.

Another large NOKIA company (Nokia) has completely outsourced technical maintenance and uses the services of IT outsourcing companies, which allows the company to reduce costs. Nokia also outsourced call center services, which allowed the company to focus on core production and marketing, as well as on creating a new product.

Discussion (14)

Any outsourcing services have now become very popular, and there is simply no end to clients. Well, it’s much easier to outsource the work if you don’t have time and where they will find you the right person themselves.

Outsourcing in Russian is when the same workers remain in the same places and do the same work, but report to another employer and receive a significantly lower salary. Although the former employer pays for the outsourcing. the company paid many times more than it previously paid its employees. The question is, who benefits from this and where does the difference go?

This is how it is in our region (Bashkortostan). We, that is, the technical staff, were transferred to this outsourcing company, where we have to sign an agreement every three months. And as they explained to us, we will work, but there will be no entry in the work book, and there will be no length of service. There are no sick days or vacation pay either. ?

Reducing the number of full-time personnel, first of all, the creation of an outsourcing company by the production manager themselves, the recruitment of unqualified personnel to the staff of the outsourcing company, the lack of social services, and finally taxes that could replenish the state treasury - this is our Russian outsourcing.

Yes, separation of powers! Protects the manager from vanity, Each specialist in his field and clearly fulfills his duties. An enterprise under socialism, even for doctors

Can you tell me about labor protection, can I provide outsourcing services? If yes, then tell me where to start, education has a direction in technosphere safety.

1. Hello.
   Our company is searching for personnel to work on a rotational basis in the Russian Federation.
   We are currently expanding the market for our services, namely searching for companies with which we plan to closely cooperate in the future,
   For a small commission, we are ready to provide you with employees for currently in-demand vacancies.
   If you are interested in our offer, then we can discuss all the conditions in the future.
   If you are interested in our offer, we will be waiting for your response by email.

   I’m an accountant, I’ve long dreamed of doing outsourcing services, but I’m afraid! And I’m not so much afraid that I won’t be able to cope or that I’ll get scammed, what scares me is that I might simply not find clients.

   My business is a cargo taxi service. This is a small organization with a staff of five people. The senior dispatcher calculates and issues salaries to employees. The rest of the accounting is outsourced. A professional accountant prepares financial statements for my company. It’s convenient, so outsourcing accounting services is an ideal option for me.

   I can say that the phenomenon of outsourcing under ideal conditions is described here, as it should be. A sort of “spherical horse in a vacuum.” In our realities, there are a lot of abuses in this area. In fact, the outsourcing agreement is a loophole that allows, for example, various state unitary enterprises subordinate to the executive authorities, after concluding government contracts with the state. the customer to give the requested work to a third-party sub. to the contractor (in this case, the state unitary enterprise retains a margin and appears as the performer of the work). This is absolutely legal, since neither 223 Federal Law nor 94 Federal Law in any way regulates or prohibits the organization that has won the competition from engaging third-party companies under outsourcing agreements, which actually perform the work.
   I know this scheme quite well, as I have often encountered it personally, having worked in the public sector for many years.
   This example, of course, does not mean that the practice of engaging contractors as part of outsourcing is in itself vicious. In private business, for example, this is used quite successfully and justifiably. And if we talk about small businesses, then outsourcing is perhaps the main means of saving payroll in the early stages of the functioning of any organization.

   A fairly convenient proposal for conducting business at an enterprise. And indeed, if the company is small, why have an entire accounting department, for example, to prepare this or that report once or twice a year))) Now everything is simple. You can easily enter into an agreement with a third-party company that provides one or another service you need. That's all! If necessary, you can use their services, thereby making your work easier and freeing up time, and most importantly, saving money! This type of service has indeed become popular in our country relatively recently, but is already very popular today.

   Undoubtedly, outsourcing services have a great future. Nowadays there are a lot of companies with a small staff. For example, in a company with 5 full-time employees, it is not profitable to have an accountant, a computer and IT specialist, but there is a considerable need for such services. Firms providing outsourcing services also spend little time on such clients, receiving payment either by the hour or by the result. Profitable and convenient.

To solve production issues, there is no need to recruit highly specialized specialists or train them in the specifics of specific activities. It’s easier to hire highly qualified specialists who will do all the work for a fee. In order to save money, enterprises began to enter into contracts with third-party organizations, having appreciated what an outsourcing company is.

What is outsourcing

The meaning of the word outsourcing must be found in English. Outsourcing is a kind of abbreviation consisting of three words outer + source + using, which literally means “using an external resource.” In a broad sense, outsourcing activities involve the transfer of certain work in some area to a third party. For this purpose, a contract must be concluded.

You should not confuse outsourcing with one-time support or occasional work, when you also turn to the services of third-party organizations. Contracts with outsourcing companies are concluded mainly for a period of at least one year and help the smooth operation of the enterprise. In this way, the organization manages not only to save money, but also to direct financial and human resources for the development of its core activities. More often, financial, accounting, transport, IT services and other administrative functions of enterprises are outsourced.

Signs and distinctive features

Outsourcing companies have a narrow specialization, which allows them to complete tasks at a high quality level in the shortest possible time. Unlike technical support or freelance services, outsourcing has its own distinctive features:

• concluding an agreement to transfer certain functions to a third party;
• the company is transferred to non-core operations that are not related to the main activity, but are mandatory for the full functioning of production;
• business processes are transferred, not those related to product production;
• long-term cooperation.

Types of outsourcing

At the moment, there is no single approach that would allow us to determine the main types of outsourcing activities. The list below reflects a more in-depth approach to classification according to a specific set of characteristics:

1. by type of transferred functions;
2. by type of activity;
3. by validity period;
4. by ownership of production assets;
5. by personnel affiliation;
6. by the volume of work performed;
7. by number of suppliers;
8. on a territorial basis;
9. by type of product supplied;
10. by volume and complexity of information services;
11. on the approach to the development of software outsourcing.

By type of transferred values

At the present stage, there are three main types of outsourcing, which are based on the type of transferred values:

• operating. A common type, the essence of which is the transfer of certain types of operating activities on the basis of a subcontract agreement. These include transportation, storage, and sales of manufactured products.
• resourceful. Its main idea is to attract additional financial, human resources or fixed assets, while outsourcing is considered a targeted strategy of the organization.
• functional. Its purpose is to transfer certain functions, including planning, accounting, and economic activities.

By type of transfer of functions

The following types of outsourcing can be distinguished depending on the type of transfer of functions:

• full. It is not functions that are transferred to a third party company, but staff, assets and production processes (for example, finance or IT services);
• selective. Used in the production of expensive products. It consists of transferring a specific set of functions to an outsourcing company;
• improved. It is used by well-known companies when some functions are transferred to outsourcers, while the company itself remains the distributor;
• intermediate. The list of functions is carried out by a third, well-established party;
• reorganization. Its purpose is to create a new enterprise, with personnel and assets transferred to the new company rather than to the service provider.
• joint. In one case, according to the agreement, the parties are partners, and in the second, it implies signing an agreement simultaneously with several organizations to minimize possible risks.

Based on the division of labor

Depending on the benefits obtained as a result of the division of labor, the following types of outsourcing can be distinguished:

• geographical. The main production is transferred to other countries of the world, where the cost of paying workers is lower, thereby saving significant financial resources.
• specialized. The relocation of entire production or a specific function occurs due to the uniqueness of the new location.

Outsourcing services

Depending on what type of activity or services the company is engaged in, the following types of outsourcing can be distinguished:

1. by type of assets involved. There are services of a material and intangible (intellectual) nature.
2. by type and quality of work. Here, services are distinguished based on the use of human labor (low or highly qualified and professional) or using special or complex equipment (automated, standard, specific).
3. by the role of the process in the value chain. A distinction is made between outsourcing of core business processes and infrastructure.

Business process outsourcing

One type of outsourcing activity can be called business process outsourcing, which represents closer cooperation between an enterprise and a third-party service provider. Non-core functions are transferred to the outsourcing organization, which represent a closed cycle. All these services are not basic for the enterprise, or, as they can also be called, business-forming. These include:

• accounting and financial accounting;
• personnel Management;
• logistics services;
• Advertising activity;
• marketing;
• legal services.

Financial and management accounting

If we turn to practice, we can see that part of the processes associated with the accounting activities of an enterprise is often transferred to financial outsourcing. This could be accounting for accounts payable and receivable, or payroll. Some business leaders are taking more radical steps - transferring all financial, accounting and management accounting to outsourcing companies. Financial services provided to third parties include:

• preparation of financial statements;
• formation of an accounting and tax base;
• audit of financial activities;
• inventory;
• preparation of tax returns;
• informing about changes in legislation;
• support of inspections.

Legal services

The essence of legal outsourcing is that an organization transfers all legal support to a company that specializes directly in this field of activity. The benefit of such cooperation is that the client is offered a diverse range of legal services, even of the narrowest specificity, which is difficult to achieve with a specific staff of lawyers.

On the other hand, there is always the possibility that the confidentiality of information may be compromised. In addition, a deep analysis of the situation does not always occur. For this reason, the ideal form is considered to be a combination of the work of an in-house legal department, which would deal with current issues of the organization, and an outsourcing company, to which the functions of in-depth analysis of issues would be transferred.

Personnel outsourcing

The essence of the concept is that the functions of the organization’s personnel service are transferred to a third-party company. The main difference between personnel outsourcing and leasing and rental (they are often combined into one definition - personnel outstaffing) is that the company orders the execution of services, rather than recruiting staff to perform it. In practice, outsourcing activities are distinguished:

• working personnel;
• warehouse personnel;
• construction personnel;
• production personnel;
• sales personnel.

Outsourcing of temporary staff is beneficial primarily because the company does not need to contact recruitment agencies with a request to select people to perform certain types of work. At the same time, there is no need to purchase equipment and organize a workplace, bonuses, vacation pay or salaries to employees. There is no need to provide employees with a social package and other privileges that employees of the enterprise have. This helps to avoid large expenses, saving large financial resources.

Logistics services

The essence of the process is that logistics operations are transferred to a third party to reduce transport costs, expenses for maintaining warehouses, etc. One or more companies can be selected for cooperation. It is advisable to completely outsource logistics functions to a company if you need comprehensive services. Otherwise, to save money, it is recommended to combine the activities of your own logistics service and those brought in from outside.

The most common outsourcing logistics services include:

• customs clearance;
• transport and forwarding services;
• procurement coordination;
• warehouse services;
• packaging of goods.

Telemarketing

Distinguish between outbound and inbound telemarketing. In the first case, a telephone survey is carried out and goods are sold. With incoming telemarketing, it is aimed at processing orders from potential buyers and litter of reviews about the company’s activities. In Russia, there is a slightly different terminology: outbound refers to telemarketing itself, and inbound telemarketing refers to call centers. In order to reduce the cost of services, they are based in provinces or countries with cheap labor.

Outsourced telemarketing is an important tool that helps increase sales, as there is a live dialogue between the seller and the potential buyer through various communication channels. You can find out how your employees work and what customers think about your company’s activities by using:

• automatic notification;
• updating databases;
• informing;
• marketing research;
• survey or questionnaire;
• looking for new clients;
• telesales;
• work with accounts receivable;
• cold calls.

Industrial outsourcing

Manufacturing or industrial outsourcing is beneficial to an enterprise when producing products in-house becomes expensive. This entails an increase in the price of manufactured products, which ultimately can affect sales growth. In this case, the client can transfer to the outsourcing company both part of its production cycle and the entire production from the initial to the final stage.

Vivid examples of outsourcing in industrial production are electronics and telecommunications manufacturers who, in order to reduce production costs, outsourced their production. In modern practice, several types of industrial outsourcing can be defined:

• production of raw materials;
• production of components or workpieces;
• outsourcing of individual functions and operations designed to provide a full production cycle;
• technological;
• involvement of third-party specialists.

IT service

IT outsourcing can be considered the most common type, since the widespread use of information technologies requires deep knowledge and professionalism of employees and system administrators. It has a wide range of functions that are associated not only with the maintenance of computer or office equipment, but also with the development and maintenance of software products.

It is impossible to completely outsource the entire IT system to outsourcing companies, since there are a number of processes that must be performed exclusively within the company. This concerns information architecture, since it represents commercial information, access to which is primarily limited. The same applies to critical services that are responsible for key business processes.

What does an outsourcing company do?

Not many people fully understand what an outsourcing company is, confusing this concept with contract work. Its main difference can be considered that cooperation occurs over a long period of time, and sometimes on an ongoing basis. As a rule, such companies conduct highly specialized activities, which helps improve the quality of work performed without overpaying for services. Today you can count a huge number of types of outsourcing services, which suggests that this activity is profitable from both production and financial points of view.

Standard contract

When contacting outsourcing companies, an agreement must be concluded, which includes the timing of the work and its cost. The entire list of services provided should be as detailed as possible. If any activity is subject to licensing, the contractor must provide this document. In addition, the agreement specifies the rights and obligations of the parties, as well as options for resolving disputes and under what conditions a claim can be filed if the rights of one of the parties are violated.

Rights and obligations of the outsourcer

Each contract spells out the responsibilities of the outsourcer verbatim. Firstly, this is the fulfillment of all conditions specified in the agreement. Secondly, he must keep trade secrets and not disclose information obtained in the course of his employment. In addition, the company must provide the customer with a report on the work done, eliminate mistakes made and pay fines if they were made through his fault. On the other hand, the performer has the right to receive timely payment for his work, and to receive all the necessary information to carry out his activities.

How to open an outsourcing company

Every year the number of outsourcing firms that provide services in various fields of activity is growing in the world. As practice shows, interest in such organizations will continue to grow, so if you decide to organize your own outsourcing business, you need to go through several stages:

1. Decide on the area of ​​activity in which you plan to work.
2. Draw up a business plan, and treat this stage extremely carefully. Only a high-quality and correctly drawn up document will help not only to maintain a stable position in the market among competitors, but also to make a profit due to the profitability of outsourcing activities.
3. Register your company with regulatory authorities.
4. Renting premises. It is preferable to choose an area in a business center or business part of the city. Renovate the premises and purchase new furniture to create a pleasant impression on future and regular customers.
5. Engage in personnel search and selection of qualified personnel - people with work experience and responsible attitude towards their responsibilities.
6. Launch an advertising campaign. You can use all means - from leaflets to television commercials. It is necessary to create your own web resource that would provide comprehensive information about your services.

How to choose a company providing outsourcing services

Although the number of organizations providing outsourcing services is large, choosing one that would suit all parameters is not so easy. In order not to make mistakes, there are several small rules:

• Pay attention to the company’s experience and the time it has been on the market. This point is important, since extensive work experience helps not only to create a cohesive team, but also to improve the quality of services provided.
• Study reviews of the company’s activities, and you should pay special attention not only to positive assessments from satisfied customers, but also to how the company responds to criticism - whether it corrects shortcomings, taking care of its reputation, or ignores them.
• Choose a company with transparent tariffs for its activities.

Cost of services

If you carefully look into the cost of work provided by outsourcing companies, you will see that formally their price is higher than the work performed by their own employees. In reality, using the services of third-party organizations has a significant economic effect, because companies do not incur additional costs for recruiting and training personnel, paying them bonuses, vacation pay and other funds. There is no need to equip workplaces and purchase tools and equipment, which can cost a lot of money.

Transfer of money to outsourcing companies occurs only upon completion of work, and there are three types of remuneration:

• payment based on results;
• payment according to the hours specified in the contract;
• payment for actual time worked.

Outsourcing work - advantages and disadvantages

Outsourcing has become popular recently, especially among the management of small and medium-sized businesses due to a number of advantages:

• saving time and money;
• performance of work by professionals;
• increasing labor efficiency by switching all resources to production;
• possibility of choosing an organization on a competitive basis.

However, before deciding to transfer a number of functions to external contractors, it is necessary to point out the disadvantages of outsourcing:

• errors in performing assigned tasks due to the involvement of unqualified personnel;
• the likelihood of disclosure of trade secrets;
• Outsourcing companies are subject to less control than their own employees.

Video

Since workers are drawn from the contractor’s organization to conduct certain business processes, the corresponding departments of the company can be reduced;

Payroll reduction

Personnel hired from a recruitment agency are not registered with the staff, so they do not have to pay a salary. There is also no need to make social and tax contributions from the payroll;

Avoiding additional staffing costs

Tax optimization

Attracting freelance workers helps to reduce the number of officially registered employees. This allows you to maintain the status of a small enterprise and deduct a minimum share of profits in the form of taxes. Also, tax costs are reduced along with the payroll;

Preventing costs for inventory, work uniforms

By ordering labor services for employees, an enterprise can receive a complete team by signing the appropriate contract;

Reducing the costs of running a non-essential business process

If the contractor is entrusted with the management of a complex of non-core tasks, and not just the responsibility of personnel selection, then the costs of performing auxiliary functions are eliminated. The customer only periodically pays the outsourcer under the contract and is guaranteed to receive the desired result.

There is an opinion that in times of general globalization and the rapid development of the business segment of the economy, being a highly specialized specialist is extremely unprofitable. This is a completely false statement. The narrower the specialization of a company or person, the higher the professionalism and deeper the knowledge. If some related activities seem burdensome to the company in terms of money or other costs, outsourcing comes to the rescue.

Outsourcing, definition and origin of the word

The word “outsourcing” is of English origin and comes from the merger of two words: out “external” and source “source”. Thus, outsourcing is, in simple words, the process of a company transferring part of its production or business processes to another company that is an expert in this field.

Delegating processes not related to the main production, but are strategically important for the outsourcer (the company taking on “other people’s” functions), the company makes a mutually beneficial exchange.

It is worth distinguishing between the concepts of one-time support and outsourcing. One-time support is episodic in nature, and an agreement is concluded with the outsourcing company for the provision of outsourcing services for a certain period of time.

What pushes companies to resort to outsourcing? First of all unwillingness to waste precious time for areas accompanying the main activity: software, accounting, technical maintenance.

Outsourcing allows you to entrust the management of these areas to professionals, and concentrate all your efforts on solving the main strategic and production tasks.

Types of outsourcing

1. Production outsourcing. Some production functions are transferred to a third party. For example, advertising agencies that use the production facilities of a printing house.
2. Business process outsourcing. The company transfers business processes that are not its main activity to a third party. A classic example is outsourcing of accounting services.
3. IT outsourcing. The company's information systems are transferred for maintenance to organizations involved in technical support and software. The list of transferred functions may include: website creation, software support or development, maintenance of computer and related equipment.

When transferring auxiliary business processes to an outsourcing company, they implement . Correctly selected metrics improve the quality of interaction between companies.

Outsourcing allows companies to focus on what matters most. Diversification - expand the scope of an organization’s activities or product range, read more about diversification.

Advantages and disadvantages

When deciding to outsource some functions, you should not rely only on the experience of Western colleagues. The general state of the economy and the position of the target market segment should be taken into account.

However, one cannot be one hundred percent sure of the success of this enterprise. This is due to some features inherent in outsourcing as a developing area of ​​business.

The main task of outsourcing is to move non-core and highly specialized areas of activity outside the scope of the business.

Let's start with the obvious advantages that come from outsourcing processes related to the main activity.

• From an economic point of view, hiring an outsourcer allows a company to significantly reduce costs. After all, the company will not have to maintain an additional structure and increase its staff. Transaction costs may also decrease. Some fixed costs can be transformed into variable costs depending on the needs of the company in a particular period of time.
• From the point of view of implementing strategic tasks, outsourcing makes it possible concentrate resources on core production, and improve operational control. In addition, the process of introducing new technological or management operations is facilitated.
• On the technological side, outsourcing opens up access to higher technologies. If the staff does not have the necessary specialists, they can be attracted through an outsourcing program. The quality of service when engaging an outsourcer increases significantly, since the third-party company undertakes to control the quality of the work provided under the contract.

Of course, there is another side to the coin. Let us outline the main shortcomings that may prevent a company from achieving its desired goal through outsourcing.

• Rising costs. This is possible if a company outsources too many processes. In addition, the implementation of an outsourcing system requires careful calculation of costs and comparison of them with the expected economic effect. Transaction costs may also increase. The possibility of bankruptcy of the outsourcing company should not be ruled out.
• Control over the execution of outsourced processes may be lost. Management may lose the connection between management and business practices. Managerial flexibility is reduced.
• The danger of concentrating technological processes in one place. This again deprives the company of flexibility in certain business processes.
• Lack of a clear legal framework for outsourcing. In addition, many companies are afraid to delegate business processes to others due to fear of information leakage or possible violation of contractual relationships.

The definition of a company's gross profit or and how is used to evaluate the operating performance of a firm.

For more information about the use of outsourcing in the activities of online stores, see the link. From delivery and outsourcing of accounting services to the transfer of almost all functions of an online store to the management of external companies.

Outsourcing examples

Henry Ford can be called the forefather of production outsourcing. He was one of the first to understand that no company can be self-sufficient.

The head of the automobile company sought to personally control all stages of production, but he was soon faced with the exorbitant costs spent on servicing all areas of the company's activities.

Then he turned to independent companies for help, which took on some of the tasks. Currently, Ford produces only 30% of its components independently; the rest of the production is outsourced.

Another giant that knows firsthand the benefits of outsourcing is IKEA. IKEA practically does not have its own production; instead, it cooperates with 2,500 suppliers, proven over the years. IKEA's logistics functions are also delegated to a third party.

It turns out that IKEA is directing all its resources to retail business organization, and the remaining services and business infrastructure are outsourced.

Kodak decided in the early 90s that leadership in the field of high technology was not its strategic goal. It outsourced all IT areas to IBM, which was precisely trying to gain leadership in this segment. An ideal example of mutually beneficial outsourcing.

Prospects for the development of the outsourcing market

In general, outsourcing seems to be a profitable deal for many companies that do not have enough resources for total control of all stages and processes of production. World statistics confirm this.

The American Management Association conducted a survey of 600 firms. It turned out that 20% of them had already outsourced some financial operations, and 80% had outsourced administrative functions.

Such statistics give reason to assume that an increasing number of companies will be looking at the possibility of using outsourcing.