are thriving which in turn is good for the entire economy. American outsourcing is one of the products of globalization, which have been advantages to other countries.
However, the Americans need not worry that they are losing jobs, but instead look at this as a thriving business that is mutually beneficial for Americans and other countries as well.
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Application Outsourcing:
Application outsourcing as defined by bitpipe.com is the deployment, management and upgrades of packaged or customized
software that is contracted out to an external provider. Today, due to the massive volume of data, companies are opting to find application outsourcing companies. However, there is always the question of security. Some companies think twice before entrusting their data to an outsource company. A company is under pressure to save cost and at the same time increase productivity, and then it has to know some tips on how to choose a good application outsourcing company.
1. What kind of outsourcing does the company need? There are many options to choose from depending on the scale. If email is needed then hosting is better. Managed services may be the best choice if a company has to scale among different countries or regions.
2. Are there hidden costs? Would the option to outsource incur more operational costs than what was expected? If yes, better think twice. A good example is in the case of collocation where the company has to think of additional expenses such as staffing, office space rents and others. There are also hidden fees from providers, which the company should know in advance.
3. Do the services come with guarantees? Companies should know whether providers could give guarantees in cases of problems.
Guarantees can also help in customer retention.
4. Does the provider provide support when the company
needs it? The company should make sure that there are available representatives every time in cases of problems. Application out
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sourcing is not an easy decision for a company especially if they are handling sensitive data. But choosing the right one and asking the important questions can make a big difference.
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What are the Benefits of Outsourcing?
The main reason why outsourcing is on the rise is that companies --- may it be small or large businesses--- are attracted to the reduction of operational cost that outsourcing entails. However, companies should not be tunneled vision to look at this as a way to cut costs. Seeing a larger picture can spell a difference to whether outsourcing can work for a company or not. Many businesses do not understand the full extent of the benefits of outsourcing. While it can cut costs, it also has lots of benefits.
1.Outsourcing can increase efficiency because outsourcing companies better does some functions. These companies might have the technical expertise and resources to do such functions at a lower cost. Lower cost means that you can make your services and products competitively priced in the market.
2. Outsourcing can reduce labor cost. The savings from labor can be used for the personnel development of your inhouse employees, which is an effective management strategy.
3. Outsourcing means that a company can make investments into more revenue-producing activities. Investors shall then see this as a good sign.
4. Outsourcing can help the company to start a project as soon as possible. This is possible because the outsourcing company has the resources and the expertise to handle the project immediately.
Unlike inhouse projects, there is no need to take weeks or months for training and support services.
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5. For small businesses, outsourcing can be beneficial for them because they can save a lot of money and enjoy the same level of efficiency and expertise that large companies have. Outsourcing can also be viewed as a leveling instrument in the playing field.
Outsourcing is not just to cut costs; it can also enhance efficiency, effectiveness and level the playing field for small businesses.
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BPO Outsourcing: Is This For All
Companies?
What is BPO? Business Process Outsourcing or BPO is the process of hiring an outsourcing company to provide services that a company should and could normally do. Before, BPO consists only of payroll services but now it also includes a number of functions such as financial and administration, human resources, customer services and accounting services.
Often, the outsourcing contracts between a company and the partner outsource company involves many years and millions of dollars. What are the basic knowhow s for companies? A company before entering into outsourcing arrangements should know some basic knowledge about this. There is a right way to approach BPO.
1. A company should be aware that outsourcing has cycles and each cycle involves strategies. Using Gartner s outsourcing model, four phases are identified. These are sourcing strategy, evaluation and selection, contract development and sourcing management. The company management should ask itself questions on each of this strategy such as the risks and the reasons behind all the actions he has to make.
2. A company must know the duration of the contract. Usually, BPO contracts last from three to five years. The company must be able to make a balance, making it long enough to produce results and short enough to easily make changes.
3. A company must be able to make identification and assessment of the risks involved in outsourcing. The main idea here is to be able to separate the functions that can be outsourced and those that must remain inhouse. There are many processed that
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can be delegated but there are those that involves much risk such as policymaking and accountability. There are still many issues that a company has to evaluate before entering BPO outsourcing. Being aware of these is the first step. The next step is applying these to your company.
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The Disadvantages of the Business Outsourcing Trend
In this day and age, outsourcing business processes to thirdparty companies has been the trend that almost every company is trying to emulate. Though outsourcing is indeed a business strategy that works for some companies, there are also some unexpected drawbacks associated with it. This is the reason why a lot of negative criticisms have been thrown to outsourcing in terms of (a) language skills, (b) quality of service, and (c) security.
When outsourcing is combined with offshoring to regions with different language and culture, expect that dissatisfaction from customers will come in. This happens mostly in call centers wherein English may not be the primary language. Customers are having difficulties understanding call center agents due to variations in accent, word usage and sentence construction. Though product knowledge may be excellent, language barrier is undoubtedly one of the factors that lead to conflicts and misunderstandings.
If there is communication gap, quality of service is at stake as well. Another factor is that since the main purpose of outsourcing is to reduce costs, other services may be put in jeopardy due to lack of necessary resources. Though questionnaires may measure quality of
