Outsourcing means getting a business task accomplished through an outside agency. It involves employing an outside agency to manage, operate and deliver one or more business activities, processes or functions. Modern business houses are too big in size, number of employees, area of operation and volume of business. Therefore, they are quite unable to attend all aspects of business with same level of interest and seriousness. Thus, they opt for outsourcing general works, by keeping crucial aspects of business under their own control and supervision. Financial services, advertising, transportation of employees, after sales service etc. are the usual areas which outsource by companies.

    Outsourcing enables the business to concentrate on core business activities.

    Business units can easily avail the expertise and specialist knowledge of such agencies at low cost.

    Business need not invest anything to get the works done through outside agencies.

    Business unit is relieved from the problems of recruiting and maintaining specialist personnel for the purpose.

    Outside agencies are specialists in the field and they can offer better services. This will increase quality of output and thus the profitability.

    Business unit can formulate plans and ensure timely implementation of them.

Scope of Outsourcing

Scope of outsourcing means, different areas and services outsourced by business units. They are:

Financial services

Financial service means all functions and activities relating to collection and accounting of financial resources of a business. It includes managing issue of shares and debentures, payroll accounting, collecting accounts receivables, maintaining books of accounts etc. Merchant banks and issue houses are doing such services for other companies.

Advertising Agencies

Here, business units entrust outside agencies who are specialists in advertising to make advertisements for them. Such agencies keep experts who can design advertisements and, maintain good contacts with media, models and other technical and professional people who can make advertisements effective and impressive.

Courier Services

Courier service means postal and parcel services provided by private firms. They carry letters and parcels at lower rates. They usually deliver these quickly and safely even out of office hours. Another advantage is that they collect letters and parcels from the place of sender and supply them at receiver’s place. They carry heavy and light articles alike.

After Sales Services

Now, after sales services are parts of marketing activities. Business units engage outside agencies to render these services to their customers. Regular servicing, repairing etc. are entrusted to these agencies as part of outsourcing. Producers and sellers of house hold durables (TV, Refrigerator, AC, Computer etc.) and suppliers of machineries are commonly availing services of such agencies. This kind of outsourcing is benefited by both companies and customers. It is beneficial to customers because their services will be available to customers at their own places. For the company, it ensures better sales and expert services to its customers at a cheaper rate.


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