Archive for March, 2021

Outsourcing Telecommunications and Other Services – A Growing Business Strategy

March 4th, 2021

Business outsourcing is a growing trend these days. It refers to a process in which certain business functions and processes are entrusted to a third party company that specializes on those jobs. Outsourcing telecommunications services, software development services, insurance, Information Technology services and accounting and finance are the most common business process outsourcing firms in Asian countries like India, China and the Philippines.

Before, business process outsourcing as a concept of business strategy was not really recognized as it seems today. During the early stages of its development, small and low grade jobs, such as janitorial and security services, were the only jobs that were outsourced in the United States. But today, almost every business processes are now outsourced. These include IT services, customer care, graphic designing services, and web content services.

Perhaps due to its many advantages, many international companies now see outsourcing as a powerful tool and business strategy to fully maximize the profit earning capacity of their every business. Outsourcing allows them to cut down costs and focus on their core business processes. With the current economic situation where recession greatly affects the earning chances of their business, outsourcing jobs serve as a viable option to override such difficult situation.

Many overseas companies are enjoying huge benefits by off shoring some of their peripheral and none core business processes to third party business process outsourcing providers that are mostly based in third world countries like India and China. This whole process allows these international companies to dedicate their attention and resources to their core business processes. There are basically none core business processes that tend to swallow a huge portion of their resources and eat so much of their valuable time, thus limiting the potential growth of the company.

In addition, outsourcing telecommunications servicesand other business functions yields cost saving benefits for many companies. Shortage of skilled workers who have the technical abilities to perform specific functions does not impose a problem on countries like India, the Philippines, and China. Despite the cheap labor costs that most Business process outsourcing firms from these countries offer, India and the Philippines are both well applauded for providing quality output as per the American and International standards.

But just like every normal business solutions, business outsourcing also comes with several disadvantages which tend to hinder others from venturing into business process outsourcing. One outsourcing risk is the loss of managerial control on functions and business processes being outsourced. Though bound with a written contract, the transfer of full managerial control to a third party company can impact expected outputs as Business process outsourcing firms are not motivated with the same vision and drive that the company has. Management will be driven by profit from the services that these Business process outsourcing firms provide.

As this drawback is being overshadowed by the numerous advantages that American and European based companies get from outsourcing, it is clear that outsourcing telecommunications services and other business processes is rapidly developing in a continuous phase. Proof of such is the wide variety of offshore outsourcing services that are being offered by today offshore outsourcing service providers.