Outsourcing definitions

Although outsourcing has been around as long as work specialization has existed, in recent history, companies began employing the outsourcing model to carry out more functions. So, what is “outsourcing”?

  • Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business.

Or, in other words…

  • Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees. Often the tasks that are outsourced could be performed by the company itself, but in many cases there are financial advantages that come from outsourcing.

Why outsourcing is needed

There are many reasons why companies choose to outsource various jobs, but the most prominent advantage seems to be the fact that it often saves money and also allows companies to focus on other business issues while having the details taken care of by outside experts. The specialized company that handles the outsourced work is often streamlined, and often has world-class capabilities and access to new technology that a company couldn’t afford to buy on their own. In addition, if a company is looking to expand, outsourcing is a cost-effective way to start building foundations in other countries. Depending on location, it may also be more affordable to outsource to companies located in different countries. To let you better assess and understand what is “outsourcing” and why your company may need it, we offer to consider 30 TOP benefits* different company representatives’ mention:

  • Reduce overheads, free up resources;
  • Minimize capital outlays;
  • Eliminate investment in fixed infrastructure;
  • Offload non-core functions;
  • Redirect energy and resources into the core activities;
  • Focus scarce resources on mission-critical projects;
  • Get access to specialized and sufficient skills;
  • Reduce need for internal commitment of specialists;
  • Save on manpower and training costs;
  • Control operating costs;
  • Improve efficiencies through economies of scale;
  • Improve time-to-market pace and quality of service;
  • Level out cyclical or seasonal fluctuations;
  • Eliminate peak staffing problems;
  • Provide the best quality services, products and people;
  • Be reliable and innovative;
  • Provide value-added services;
  • Increase customer satisfaction;
  • Establish long-term, strategic relationships with world-class service providers to gain a competitive edge;
  • Enhance tactical and strategic advantages;
  • Focus on strategic thinking, process reengineering and managing trading partner relationships;
  • Benefit from the provider’s expertise in solving problems for a variety of clients with similar requirements;
  • Obtain needed project management and implementation consulting expertise;
  • Acquire access to best practices and proven methodologies;
  • Spread your risks;
  • Avoid the cost of chasing technology;
  • Leverage the provider’s extensive investments in technology, methodologies and people;
  • Reduce the risk of technological obsolescence;
  • Increase efficiency by consolidating and centralizing functions;
  • Keep pace and minimize the impact of rapid changes in technology without changing your infrastructure.

*According to Global Sourcing Research Company’s survey, 2012

What is ”Export Outsourcing”?

The effect of free trade on the Global economy has resulted in more businesses having access to more markets all over the world. Products of all types are sold in more countries and in greater variety. As the volume and complexities of international sales increase so do the export controls that govern those sales. Export control requirements may differ with every shipment, depending on commodity, application, consignee’s country, end user and country of end use. As a result of mentioned above, a new type of outsourcing, “Export Outsourcing” has become increasingly important.

  • Export outsourcing is the practice in which firms that receive international orders subcontract the entire export process to an export outsourcing company.

In order to successfully access the markets in all parts of the world the firm must have knowledge of the many regulations that affect international traffic. Because of this, many businesses that deal in overseas markets are now choosing to outsource their exporting to qualified professionals.

  • Firms with new or large expansion into foreign markets beyond the domestic markets can outsource all of the details of processing the orders to international markets to a particular export outsourcing company, which will carry out the entire stepwise process for an affordable price, making it an ideal option for businesses large and small.

Export outsourcing or management company has the vital, detailed expertise in working with international trade, global business processing, global transactions on domestic imports and exports, so, using export manager services can save domestic firms costs resulting from potential delays or penalties for lack of proper handling and international documentation.