The highly competitive global environment, the constant search for greater market share or higher business volumes are factors that can lead companies to exceed their own resources, which is why outsourcing has become a tool used to improve business aspects. such as response and reaction capacity, costs and labor relations, among others.
What is Outsourcing?
The word is an anglicism that is composed with the voices out, which means "outside" and source, which translates "source" or "origin", that is, external source (Meanings, s / f). For its translation in Spanish, the word is understood as "subcontracting" and some bibliographic sources also express it as "outsourcing"; However, it is important to note that some companies handle the term outsourcing as contacts and transactions within their own country, while the term outsourcing is taken as an assignment of part of their work or an acquisition of services to a company that is located. in other country.
Some authors offer us certain definitions of outsourcing, below are some.
Table 1. Different definitions of outsourcing by different authors. Own elaboration.
| Outsourcing | James Barry / Robert White | Contractual relationship between an external seller and a company in which the seller assumes responsibility for one or more functions that belong to the company. |
| Noah Mondy | External sourcing whose process is to transfer responsibility for a service area and its objectives to an external provider, driven by the need to reduce costs caused by low revenues or more limited budgets, mergers and acquisitions that have created many redundant systems. | |
| Chase, Jacob, Aliano | Action to move some of the company's internal activities and decision responsibilities to other external suppliers. |
From the above definitions, it can be concluded that outsourcing is the contracting of a service to a company, to carry out the activities of the company that hires, but which leaves the contracted at the disposal and administration; in order to satisfy the company's own needs but managing them does not contribute to its productivity.
Outsourcing Evolution
The term outsourcing is not a new concept, this strategy began to be applied several decades ago; However, it has become more relevant due to its wide adoption by all types of companies.
origins
It arose in the 1940s (S. XX) in the US, after the Second World War companies began to undertake so many activities that the use of this strategy became necessary, however, it was in the 1970s when it began to take shape for technological information services in companies, having consultancies such as EDS, Price Waterhouse and Arthur Andersen as pioneers.
The term outsourcing appeared in the 1980s to describe the growing trend of large companies that were transferring their information systems to suppliers (Cuartas, 2008). Examples are shown such as CODETEL (Dominican Telephone Company), Dell and AT&T Wireless, which were some of the first companies to use it for assistance in call centers, using resources from other countries.
Present
A recent study by Aberdeen, a North American company, indicates that total spending in the global outsourcing market increases at an annual rate of 12% and has a market penetration in some or all of the human resources functions of 39% in organizations with annual income of less than 50 million dollars, 40% in organizations with annual income between 50 and 999 million dollars and 66% in organizations with income greater than 1,000 million annual dollars (Salazar, 2010).
According to the study «Nearshore Attraction» Latin America, Attractive Destination for Global Outsourcing «, by KPMG International, Latin America with countries such as Mexico, Argentina, Brazil, Chile and Colombia; It is positioned as a friendly zone for outsourcing. In addition, Costa Rica, Panama, Uruguay and other countries in the region are also beginning to participate in this industry. Indicators from other consulting firms have stated that in 2011 alone it grew between 5 and 5.5 percent and at the Latin American level, Brazil ranks first in the development of outsourcing services with Mexico as the second country in the region. (El Financiero, 2011)
Generations
First generation
Focused on cost savings, looking for the same work to be done, better, faster, cheaper or all three.
Second generation
Outsourcing becomes a strategy, focused on including even greater savings in opportunity costs.
Third generation
The most recent and current. Now executives look to their outsourcing partners as sources of innovation, getting new ways of doing business.
Outsourcing business strategy
This business strategy is aimed at reducing costs and improving productivity, by directing the trivial sectors of the business to an external company and focusing on the administration of essential resources; This allows them to take it as a growth tool. Implementing the strategy enables companies to focus on reengineering benefits, access global capabilities and materials, share risks, and better focus their efforts on other purposes.
Types of outsourcing
According to Cuartas (2008), this business strategy is classified according to the areas of the company that are commonly subcontracted, having:
- Outsourcing of financial systems. Outsourcing of accounting systems. Outsourcing of IT systems. Outsourcing in the Human Resources area. Outsourcing of administrative systems. Production outsourcing. Outsourcing of transportation systems. Outsourcing in the area of sales and distribution. Outsourcing supply.
In addition, according to the transfer of items to the contracting company, it is classified into:
- Total Outsourcing: Equipment, personnel, networks, operations and administration are transferred to the contractor. Partial outsourcing: Only some of the elements of the Total are transferred.
Modalities
Among the modalities are (Meltom Technologies Inc, s / f):
- Off-shoring: It is the contracting of services to third parties based in another country offering lower costs of labor legislation or other factors. In-house: It occurs in the premises of the contracting organization; Off-site, is when it occurs in the facilities of the contracted company. Co-sourcing: The service provider offers added value to its client, such as risk sharing. Collaborative: Idle capacity is used to produce articles or provide services to a third party.
Outsourcing benefits
The biggest benefit is that the company that acquires this strategy acquires more functionality with lower costs. Other benefits are:
- Investment in plant and equipment is reduced by decreasing manufacturing and fixed costs. The company responds quickly to changes in the environment. It improves the construction of shared value and helps to redefine the core of the company. It improves the time of delivery and quality of information for critical decision-making. Better technology is achieved without the need to train staff. Considering competitive pressures, information services can be made available quickly. Organizational flexibility increases.
Negative aspects of outsourcing
Like any tool or business strategy, at some point it stops appearing to be suitable and can present disadvantages when applied. Among the negative aspects that outsourcing can bring are:
- The cost of its application may end up being higher than expected. The service of the supplier company may be productively negative. The contracted company can copy the type of business by entering and knowing the company that acquired its service. It can contribute to the exploitation and to the dehumanization of the worker.
conclusion
The areas with the highest recurrence of application are mainly in human resources and IT, followed by security, maintenance, accounting and technical support.
As every business strategy presents both positive and negative aspects in its implementation, the contracting party transfers part of its administrative and operational control to the contracted one, which may take away its autonomy and independence, it is possible that the quality of the service received is low due to the High turnover of the contracted staff is frequent, because its employees do very routine jobs that do not offer them a space for growth.
Despite all the positive trend in the adoption of outsourcing, as a business strategy, it is because the company that implements it demarcates from its daily execution a function that is not vital, allowing it to focus on the core of its business, in what he really knows and does well and generates value.
Bibliography.
- ACFE. (2011). Recovered on September 5, 2015, from Outsourcing, a new form of labor relationship: http://www.administraciondenomina.mx/outsourcing- nueva-forma-de-relaci-n-laboral / Almanza Martínez, M., & Archundia Fernández, E. (2014). Outsourcing and Tax Planning in Mexico. México, DF.: EUMED.NET.Bohon Devars, JA (July 30, 2009). Advantages and disadvantages of outsourcing. Retrieved on September 5, 2015, from cnnexpansion: http://www.cnnexpansion.com/opinion/2009/07/30/ventajas-y-desventajas-del- outsourcingChase, JA (2005). Production and operations management for a competitive advantage. Mexico,] Df.: McGraw-Hill.Cuartas, DH (2008). Principles of administration. Medellin. Textos academicos.Hurtado Cuartas, D. (2008). Administration Principles. Medellin Colombia:ITM Fund (Metropolitan Technological Institute).ISS Global A / S. (s / f). issworld. Retrieved on September 5, 2015, from History of Outsourcing: http://www.mx.issworld.com/es-MX/acerca/zona-de-learning / ideas-outsourcing / historia-del-outsourcingMartinez, D. (2013). "Outsourcing" a modality that lowers costs and increases productivity. (Caribe, Editor) Retrieved on September 5, 2015, from ficaconsulting: http://www.ficaconsulting.com.do/cw/index.php/publicaciones/14-administracion/31-outsourcing-una-modalidad-que- lower-costs-and-increase-productivity Meltom Technologies Inc. (s / f). Outsourcing. Retrieved on September 5, 2015, from deGerencia.com: http://www.degerencia.com/tema/outsourcingMondy, NR (2005). Human resources management. Mexico, DF: Pearson Prentice Hall.Robert White, JB (1998).The Manual Outsourcing. USA: Gower.Salazar, J. (2010). Outsourcing, common practice without legal recognition. Business Consulting No. 10, 28. (s / f). Meanings. Retrieved on September 6, 2015, from Outsourcing:
Thanks
To the National Technological Institute of Mexico, National Institute of Mexico, for being my house of studies and to Dr. Fernando Aguirre and Hernández for their criticism and motivation to publish my articles.
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