Outsourcing is the handing over of internal affairs of certain operations/processes of a company to an external or unrelated party that specializes in a particular service. Outsourcing may also include buying of products from an external source or party.
The external party has the control on the operation or process designated over it. Therefore, the company has nothing to do with the results of the operations. This party is an outsourcing company. Its clients, however, are neither ordinary nor special folks. They serve artificial entities such as an organization, company or a large firm. Usually, the services done by these companies were those that are not within their clients’ core competencies and that the labor costs in their clients’ localities are usually higher than in the outsourcing companies.
Some types of outsourcing services they provide include:
- IT Outsourcing – is the type of outsourcing service that includes everything within the Information Technology horizon.
- Technology Support and Maintenance Services – are services including maintenance, repairs and the like. Advanced Technology Services is one of those that provide these kinds of services.
- Data Analysis – is an outsourcing service that manages facts through investigations and analyses. LASON provides a service like this.
- Research Process – is a forte in outsourcing. People refer to is as Knowledge Process Outsourcing (KPO) for its utilization of specialized information of a lofty echelon.
- Business Process Outsourcing (BPO) – aid companies notably lower down their costs and expenses but still satisfy customer’s demands by influencing technical expertise or skilled process sellers. Generally familiar samples of this are call centers, human resources, accounting and payroll outsourcing. It is also under the Software Development Outsourcing. Several companies among the top 100 of IAOP’s list provide this kind of service.
- Engineering Design – is a type of outsourcing that creates designs of concrete matters as enormous as towering processing plants or buildings to as tiny as wristwatch batteries. It also comes in first after Software Development.
- Medicare Outsourcing – is an outsourcing service that complements the needs regarding health and sickness. It encompasses both data analysis and basic research.
- Legal Support Services – are services that would satisfy clients with their needs concerning legal matters, requirements and documents. Patent application preparation falls under this that requires necessary knowledge and skills. SPI Technologies provides Litigation Support that falls under this.
- Art, animation, editorial and DTP work – are outsourcing services that require creativity in both visual arts and literary world.
- Outsourcing Logistics Services – are services wherein a client company asks for a third party to provide specialized forecast for the administration of the activities included in the company. Excellerate HRO provides this service.
- Environmental Services – are services made by a third party by providing necessary facilities and equipment to a client company for the attainment and maintenance of cleaner and greener surroundings.
- Software Development – is the IT outsourcing service among its types. It is now the most famous for its coincidence with the rapidly growing information technology. This type of outsourcing service provides development of software.
Among the Top 100 Outsourcing companies reported by International Association of Outsourcing Professionals (IAOP) earlier this year 2006 its list of top 100 Global Outsourcing Companies. The top five among the list are:
1. IBM – provides Information Technology and Business Process outsourcing services.
2. Sodexho Alliance – gives off environmental services and services related to real estate and capital asset management.
3. Accenture – serves Business Process Outsourcing, Information Technology Outsourcing and Financial Management.
4. Hewlett-Packard – is a company whose specializations are Information Technology, Financial Management and services regarding imaging and printing.
5. Capgemini – is a source of Information Technology and Business Process Outsourcing services as well as Financial Management.
As the list continues, it includes Genpact, Teletech, LASON, Williams Lea, Vertex, Cambridge, MphasiS, Equinox, and etcetera.