Outsourcing: a detailed definition of the concept, types, pros and cons of outso

Posted by Joseph Spolb on July 22nd, 2019

Hello, dear colleague! In today's article we will try to figure out what outsourcing is and what it is for, what types of outsourcing are available, consider the main advantages and disadvantages, as well as the differences in outsourcing from outstaffing.

1. Outsourcing - what is it in simple words

Foreign terms tightly entered our lives. Literally in the last article, we studied the concept of “offshore” , the etymology of which comes from English. Today we will talk about outsourcing and touch on the topic of outstaffing.

So, what is outsourcing in simple terms? Translated from the English word outsoursing : out - external, outside, source - source, that is, putting together the two parts, we get the “external source”. The essence immediately became clear, in other words, the use of external (third-party) resources.

They have never asked themselves the question: why do so many potential entrepreneurs ruin the business vein within the idea stage? I will answer you. Because, having caught this very idea, they begin to describe what resources they need for its implementation and there is a huge amount of side staff units, and this entails additional costs.
In order for you to be more understandable, in this article I will try to give the maximum number of examples.

For example, you had the idea to open an online store selling handmade soap. Soap you know how to cook yourself. And here business planning begins  (very well, if it starts, many people don’t even think about it and rush into the pool with their heads), besides what you produce, you need a person who is engaged in the promotion of your group, a person who will accept and process applications and so on. For example outsourced customer services.

Immediately a thought arises, and maybe, well, its this business. To hire everyone to work, to pay insurance premiums to the pension fund and many other problems. This is where outsourcing comes to the rescue.

You can simply enter into a long-term contract with a company or an individual providing this kind of services and start doing your favorite business.

Three years ago, many scientists, political scientists and economists asserted that it would be difficult for narrow specialists in the future, but it turns out not. Just the same for them the future. Outsourcing (subcontracting) companies, as a rule, do not overestimate the price of their services and take, rather, not only quality, but also the number of long-term customers.

If the business on the Internet is less clear, then how will it be with the offline business.

In this matter, almost all the same. For example, you decided to open a consulting center, provide services on various legal, personnel, accounting issues and so on. In addition to the fact that you need to rent an office, hire specialists, there is a need to maintain and adjust equipment, clean the room, wash windows, additional specialists to carry out an integrated approach, and so on. Outsourcing services will come to your aid again.

By signing an agreement for IT outsourcing, you save yourself from having to hire specialists in the staff, and, therefore, reduce costs.

Long-term relationships with accounting outsourcing  will also free you from headaches about reports and payments. By the way, now more and more often there are specialists who provide outsourcing of accounting services. Immediately after graduating from the university, many accountants are not willing to take on a job without experience and in order to gain this experience, they start outsourcing and, believe me, this is a very profitable business. Because they can take on several clients at once.

The same can be done by specialists in any field.

Thus, in this paragraph of the article we have considered in simple words what outsourcing is. Let's now consider what kinds of it are in Russia.

2. Types of outsourcing in Russia

In Russia, and throughout the world there are a large number of types of outsourcing, it is also called subcontracting. Let's look at the most popular.

Business Process Outsourcing

This type combines all the processes that can be delegated to the maintenance of your business. Finance and accounting, personnel outsourcing, outsourcing of labor protection, internal audit, as well as a number of specific powers specific only to a specific industry.

IT outsourcing

This type of subcontracting covers a very large range of tasks. Today it is the most popular and common. To IT outsourcing can be attributed, as banal office equipment maintenance, and software development, consulting, design, and so on.

In the era of the development of information technology, many large and small firms use this kind of outsourcing, thereby reducing the cost of hiring specialists in the staff.