Outsourcing - definition, advantages and disadvantages, partners

Outsourcing is a business strategy in which companies outsource certain tasks or processes to external service providers. It can often be cheaper and more productive to outsource the Outsourcing advantages for themselves. Especially when companies grow, managers consider whether to hire staff or outsource work. Properly implemented with a good outsourcing partner, outsourcing can of projects and work bring great advantages for a company.

In this article we tell you:

  1. What is outsourcing?
  2. What are the advantages and disadvantages of outsourcing for companies?
  3. Examples of outsourcing.
  4. For whom is outsourcing worthwhile?
  5. Outsourcing Partner
Outsourcing Eastern Europe
temporary employment engineers

What is outsourcing?

Outsourcing is a way for companies to increase their efficiency and profitability. This is because it allows them to outsource certain tasks or processes to external service providers - whether domestic or international - who often offer specialised skills at a lower price than internal staff.

Advantages of outsourcing

Companies choose to outsource production or services for a variety of reasons, here are a few:

  • Cost savings
  • Focus on core competences
  • Access to expertise
  • Flexibility and scalability
  • Risk management
  • Time saving
  • Improved quality
  • Global competition

Disadvantages of outsourcing

Although outsourcing can be beneficial for many companies, there are also some potential disadvantages that should be considered:

  • Quality control if the service provider is based abroad.
  • Loss of company-specific knowledge
  • Security risks
  • Dependence on third parties
  • Communication problems
  • Loss of flexibility
  • Image and customer relationships
  • Legal and compliance risks

Despite some disadvantages, outsourcing is an important option for many companies to improve their competitiveness.

Outsourcing Eastern Europe
production relocation automotive industry

Examples of outsourcing

Outsourcing of processes, production or services is common in different industries and for different business functions. Here are some examples of outsourcing in different areas:

  1. Information technology (IT):
    • Application development: A company can outsource the development of software applications to external service providers.
    • IT support and helpdesk: Support for end users or IT helpdesk services can be transferred to external companies.
  2. Human resources:
    • Payroll accounting: Companies can outsource payroll accounting to specialised service providers.
    • Recruitment: The search for qualified employees and the recruitment process can be left to external personnel agencies.
  3. Accounting and finance:
    • Accounting services: Companies can outsource accounting services, including accounting and financial reporting.
    • Tax preparation: The preparation of tax returns can be handed over to external tax consultants.
  4. Customer service:
    • Customer support: The provision of customer support and helpdesk services can be outsourced to external call centres or customer service companies.
    • Social media management: The management of social media platforms for customer interactions can be outsourced.
  5. Production and manufacturing:
    • Manufacture of products: Companies in the manufacturing industry ( e.g. in the automotive industry, Chemical industry) can delegate the production of parts or products to external manufacturers.
    • Assembly and packaging: The assembly and packaging of products can be outsourced to external service providers.
  6. Logistics and supply chain:
    • Warehousing and dispatch: The warehousing and dispatch of goods can be transferred to external logistics companies.
    • Transport and freight: Companies can outsource the transport of their products to external freight forwarders.
  7. Facility Management:
    • Cleaning services: Companies can outsource cleaning services for their office or production facilities to external service providers.
    • Maintenance services: The maintenance of buildings, systems and equipment can be handed over to external specialists.

For whom is outsourcing worthwhile?

Outsourcing can be beneficial for companies of any size and in any industry. However, small or medium-sized companies that do not have sufficient resources to carry out certain tasks internally benefit in particular. By outsourcing with the right outsourcing partner, they can concentrate on their core competences and save costs at the same time.  Large corporations also use outsourcing as a strategy to increase efficiency and save costs. They mainly outsource repetitive activities such as accounting or IT support to external service providers in order to free up internal capacities.

However, every outsourcing project should be carefully scrutinised to determine whether outsourcing is actually more economical than finding an internal solution - especially if sensitive data is involved or high quality standards are required. Overall, however, in many cases it is worth placing your trust in an experienced partner in the field of outsourcing - as this allows potential to be realised. 

Outsourcing Partner

At Zeitarbeit International, we offer you a wide range of services to optimise your business processes and make them more efficient. Our expertise lies in the areas of industrial services, machinery relocation and production relocation to Eastern Europe. We understand our clients' needs and work closely with them to provide customised solutions.

Our work allows you to concentrate fully on your core business - we make sure that everything runs smoothly. Contact us today and become our partner!

Contact
Temporary work International