Quite possibly we have already heard he term "outsourcing" and this like many other concepts we use in English as they do not have a literal translation, in Spain for example they have defined it as "outsourcing", and that way it gives us an idea of what it means.
About the concept, I asked several people how they would define it and came to this conclusion:
"It is the business strategy that allows an external partner to be entrusted with the performance of continuous (non-core) functions in a company"
And it should be noted that in this definition there is a very important element and that is that we are not talking about a service provider, but rather an external partner and of course if we share with him or them areas of our companies that contribute to the achievement of our objectives, the We become our associates to carry out functions that apparently do not contribute anything to the business but that we definitely cannot do without.
Derived from being immersed in a globalized and highly competitive environment, companies have had to constantly innovate in order to often only survive. The constant change has caused organizations to tend to be increasingly adaptable to the situations in their environment, so those who want to stand out in their environment will have to modernize and climb current organizational trends, among which we can mention: flat structures and flexible, multifunctional posts and reduction of control sections (average 4 posts).
That need to be up-to-date, leads companies to focus on the core of their business and in many cases redefine their strategy, mission and vision, a clear example is the high-tech companies that were previously dedicated to producing and marketing their products. And now they focus on technology development by outsourcing areas that they do not consider priority and that suppose they give them more headaches than tangible benefits.
Examples of success in prestigious and world-class companies outsourcing functions have set the tone for taking outsourcing as a real alternative to optimize company operations, and we can mention, for example, that areas such as Swissair and Lufthansa have changed their accounting. completes India where its financial statements are processed even though they do not have scheduled flights to New Delhi, or we have the case of a software program center located in Bangalore that serves some 30 multinationals including Microsoft, Oracle, IBM, Motorola, 3M and Siemens developing programs and systems and products that you and I commonly use and that also represent a substantial saving for these companies since it sometimes costs half of what it would cost them to do in the United States or Europe.
In Mexico the most common services to be outsourced are surveillance, cleaning, dining rooms for employees, messaging, etc. But it is increasingly common to see that many companies are already hiring legal and accounting services externally (almost 60% of companies have outsourced in this area). Another example is transport services for the movement of products to distribution channels; It is expected that by 2002 this function will be outsourced by 50% of the companies (currently, 25% already have the service).
We can also see this in information systems, where 40% of companies also expect to outsource these services. And, of course, something similar can be seen with production, financial and storage functions.
An excellent example is provided by the human resources area. If a company has different personnel needs, because its production levels rise or fall, because demand is cyclical or temporary, then the cost of having permanent labor for all the time is very high. Therefore, it is convenient to convert it into a variable cost, so this cost will move according to the needs. That makes the company more competitive from the point of view of the income statement, and we do not leave out the training that is more and more frequent that we do it externally to train our own internal instructors.
We could then summarize the reasons why a company uses “outsourcing” as a solution:
• Tactical reasons
- handle a difficult to manage or out of control function
- resolve the lack of internal resources
- reduce and control operating costs
- decrease capital investments
• Strategic reasons
- free up resources for other purposes
- share risks
- accelerate reengineering benefits
- access world-class technologies
- improve the company's approach to business
Being factors to consider for outsourcing to be successful, the following:
1. Only give third parties tasks that are not linked to income generation
2. Employ subcontracting to dedicate yourself to the heart of the business, allow someone else to dedicate to peripheral areas
3. Focus on increasing the quality of what you know how to do
4. You will need to work with (not at the expense of) the supplier to make it a strategic partner and compete in global markets
5. Do not see it as an opportunity to decrease the payment to your staff
So far, we have seen the benefits that outsourcing has for companies, but it should not be neglected that, as a consequence of the challenges imposed by globalization and strong competition, they have been forced to reduce their workforce. However, this does not necessarily mean that the people they dispense with become high unemployment statistics.
Indeed, many times restructuring plans obey the obligation to reduce costs, but not to eliminate processes. In other words, the need for personnel continues. What changes is the way of bonding.
Hence, the outsourcing of services becomes more pronounced every day. Thus, those who previously worked as employees now become entrepreneurs who make their knowledge and experience as individuals or corporations available to the company for which they previously worked.
In other words, those who were previously employees today make up outsourcing companies that supply the needs of the company in a specific activity. Thus, the negative impact produced by a layoff is mitigated and, in addition, gives rise to new sources of employment.
For many, the removal of a company's payroll does not necessarily mean unemployment. Being trained, having money to invest and, of course, an entrepreneurial spirit turn out to be the ingredients to face the new labor scenario that is prevailing today.
Becoming external partners of companies is a viable and increasingly valid alternative.
