The concept of outsourcing is nothing but implementing the strategic use of resources outside to an organization to achieve its business objective in a structured way. This is also getting the things done from a third party organization which was previously handled by domestic staffs.
Outsourcing activity can be defined as a strategy through which the company can contract out major business factions and get expert and efficient service. Thus these new companies gradually become a valued business partner.
Outsourcing at a Glance
Donald Trump in his every election campaign tries hard to bring back the jobs to the United States. However, it is not easy to do so. The statistic says outsourcing is still at the front for any organization operating in the US. There are many reasons for it. Firstly the labor cost is high in developed countries like the USA as compared to India. Secondly, at the time of peak season, the internal staffs are not able to handle the work pressure. So outsourcing services is a tried and tested technique for the organizations to build a good business long-term relationship with the clients and enhancing the business reputation.
The reasons for Companies Outsource
Outsourcing is not alone used for cost management. It has several good reasons to be implemented. Below are the reasons why we should go for outsourcing business activities.
- Keeping control over the business.
- Developing focus on the core business functional area
- Tumbling down the operating costs of the organization.
- Gaining expert capabilities and efficiency
- Deployment of internal staff and resources.
- Increasing efficiency of in house employees
- Availing latest technology and infrastructure
- Best utilization of available resources.
- Sharing risk
Outsourcing services is not for every organization. The business owners analyze the need for their business and make an informed decision based on that. Outsourcing can be successful only if the work is to be delegated to the right person at the right time.
Below factors are the outcomes of undesirable outsourcing. Every enterprise should think before implementing outsourcing to its organization
Hindrances in Outsourcing
There are certain aspects in which we should think before doing outsourcing. The major hindrances associated with outsourcing accounting services activities are as follows:
- Your domestic staff may feel threatened
- Internal staff may lose interest in their work.
- The service quality and standard may differ
- You cannot maintain a standard quality
- You may face language barriers
- Problem of data security
- Difficult to follow organizational policy and procedures
Outsourcing started with IT, pharmaceuticals, computer technology and for retail services but in no time people realized its significance and it spread out in a very quick period. Now the business financial activities financial service industry is more into outsourcing business. Staring from routine bookkeeping activity to the complex tax filing everything can be outsourced.
The critical areas which should be considered for a successful accounting outsourcing are
- A clear vision of the goals and objectives of your business
- Selection of vendor
- Activities to be outsourced
- Relationship management
- The clientele
- Support and involvement of the leaders and managers
- Communication with the stakeholders
Now not only cost and headcount reduction is the major reasons for implementing outsourcing. People in the recent era are more concerned about the value-added activities of the digital environment. Think smart. Think on the following checkpoints if at all you are going for outsourcing.
Among everything, the most important things are Open Communication and the support and involvement of the leaders and managers to your business.
- Open Communication: Service Level Agreement is something which is communicated to all the staffs. Every staff of the organization should be well versed about their aim and responsibility to achieve a common business goal. So in the process, open communication is highly needed
- Executive Support: involvement and support of leaders and managers are very important. Outsourcing initiatives are the Strategic planning which should come from the top level for the benefit of the organization.
We are your trusted business partner. We suggest you know your business and identify the core area of your business. So you can delegate the non-core activity to a third party and save your valuable managerial time.
Leaders and managers need to frame strategies and implement those plans to get success. Outsourcing methodology also frees up your internal staff and enables them to take other organizational responsibility