A BRIEF EXPLANATION OF OUTSOURCING
Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff. It is a strategy by which companies can focus on their core competencies while delegating other functions to specialized service providers.
1. Types of Outsourcing
a. Business Process Outsourcing (BPO)
- Includes back-office operations like accounting, human resources, data processing
- Front-office operations such as customer service and technical support
b. Knowledge Process Outsourcing (KPO)
- Research and development
- Data analytics and interpretation
2. Benefits of Outsourcing
- Cost savings
- Access to global talent pool
- Increased focus on core business
- Improved efficiency and productivity
- Enhanced flexibility and scalability
- Risk mitigation