Instead of employing people and managing the non core function of the company ourselves, hiring professional service provider and handing over defined task is called an outsourcing.
In data innovation, a re-appropriating and outsourcing initiative with a technology provider can involve a range of operations.
Benefits:
The outsourcing varies with client & situation, but the benefits of outsourcing remains same:
- Reduces and
controls operating costs:
Outsourcing is less expensive than recruiting another employee, and it
also takes away some level of uncertainty about costs. The contract will
determine exactly what will get done and for what price.
- Improves company
focus: By outsourcing
less important tasks, you increase the company's focus on tasks that are
deemed more vital.
- Expands talent pool: Rather than relying on the talents among
your employees, outsourcing allows you to draw from a virtually endless
pool of potential talent.
- Shares risk with
another company: The contractor or
contracting company will share some of the responsibility for completing
the tasks that are assigned to them.
Why to shift to outsourcing:
· Develop
efficiencies
· Gain
speed.
Requirements for Successful Outsourcing:
- Clear goals, visions, and plans
- Careful vendor selection
- Open communication with stakeholders
- Executive support
- Careful attention to personnel issues
- Short-term financial justification
- Relationship management
- Properly structured subcontract and vendor agreements