Complete Guide to what Outsourcing is and Outsourcing to the Philippines

outsourcing companies

Outsourcing is an option that many businesses are turning to when they need help with completing work promptly. If you are looking for someone to complete your work, then outsourcing is the answer. Outsourcing has become popular because it can be cheaper than hiring employees and it provides more flexibility when managing your own workforce.

This blog post will discuss what outsourcing is, why companies outsource their work, and how you can benefit from outsourcing to the Philippines!

  • Outsourcing is the practice of delegating work to a third party. This can be an individual or company that you hire to complete your project for you.
  • There are many reasons why companies choose outsourcing, but most importantly it allows them to focus on what they do best while someone else does the rest!

In addition, outsourcing has become popular because there is more flexibility with managing employees and fluctuating workloads.

For example, if one employee happens to get sick then management will have additional staff members waiting in line who can take their place without any problems at all!

  • Oftentimes outsourced workers end up having lower salaries than full-time employees which means businesses save money when hiring this option as well. Depending on the country, you can also take advantage of tax credits and payroll contributions.
  • Outsourcing to the Philippines is a popular choice for many businesses because there are so many talented workers eager to work in this industry who are more than happy with lower salaries when compared to Western countries! If you need assistance completing your project then outsourcing may be an option worth exploring!

What is outsourcing?

technology outsourcing

Outsourcing refers to when a company uses external contractors to accomplish things it could do for his/her employee. The outsider could be overseas or it might be a neighbor in the same block. Some workers might not lose their job.

The outsourcing would include shifting employees from the original company’s customer service to an outsourcing company that would handle eCommerce and other aspects for such positions. Workweek’s hours will probably not change too much as they’ve been previously done but their paychecks would technically stem from another entity that the employee might still have had to go to. There may be everything that includes anything from cleaning to customer care.

This is what outsourcing means. It allows companies to focus on their strengths while getting the work that needs to be done from other sources who specialize in these tasks.

For example, if a company doesn’t have a customer service department then they can hire someone else to handle those jobs for them and it will cost less because wages are lower overseas than in Western countries.

Outsourcing has become popular because there’s more flexibility when managing employees and fluctuating workloads – such as if an employee becomes sick then management would still have staff members ready to take over without any problems at all!

Outsourcing usually takes place outside of Western countries which allow businesses to save money by hiring this option since rates are cheaper abroad; however, outsourcing with the

The Philippines is a popular choice for many businesses because there are so many talented workers eager to work in this industry who will happily accept lower salaries when compared with Western countries.

Reasons for outsourcing

services business

In order to gain efficiency, firms tend to outsource to reduce costs. If it can be made easier by the third-party provider because it focuses on it specifically it can do it better, faster, and cheaply than the hiring company can. There are many other reasons for outsourcing but it is most commonly done to allow firms to focus on what they do best.

The Top Reasons for Outsourcing include:

Reasons for outsourcing could include: saving money, gaining efficiency, improving customer service, or allowing staff members to concentrate more on what they do best.

  • To save money by hiring cheaper labor overseas in places like the Philippines where wages and living costs are lower than Western countries; this will also qualify businesses for tax credits, payroll contributions, etc.
  • It provides more flexibility when managing employees and fluctuating workloads – such as if an employee becomes sick then management would still have staff members ready to take over without any problems at all!
  • Companies can concentrate their efforts on what they do best while someone else does the rest because of a lack of expertise or personnel within their company that specializes in certain tasks.
  • It can allow companies to focus on their core competencies and improve the customer experience.

Outsourcing is most commonly done to reduce costs by hiring cheaper labor overseas where wages and living costs are lower than in Western countries; this will also qualify businesses for tax credits, payroll contributions, etc., there’s also more flexibility when managing employees because if an employee becomes sick then management would still have staff members ready to take over without any problems at all!

Examples of outsourcing by large companies

outsourcing providers

Below are a few examples of large corporations that utilize outsourcing companies, keep in mind that there are many small to medium-sized businesses that use this business strategy as well.

Google

The company had about a thousand employees from 60 different countries in 2011. Google can also be referred to as an excellent example of externalizing Software Development functions and virtual assistant work. In 2020 the company expects to extend operations and maximize cost savings of outsourcing. In 2019, Google was expected to employ around 1,000 workers located across the globe.

Slack

Slack is a shining example of outsourcing business. The core technology team of four engineers developed the first version in 2013. Earlier in the development life cycle, the designer delegated design to a company delivering services. The Beta versions and design copy were tested outside their company and that’s what had been received by the users. In response to that, it released a service that has several times beat it.

BaseCamp

BaseCamp is a popular project management product in the world. After only being a popular device four of those developers were in-house. This time the firm decided to expand the development department by outsourcing some technical support to foreign partners. Following the hire of a few new remote developers, the project had a better balance of working with bugs and implementing new functions much faster and ultimately increased the product’s popularity worldwide. For some companies, the solution worked great but with new users, the product spawned a mess in development processes causing many difficulties.

Skype

Skype is a software that lets users be able to make telephone calls over the internet for free. Skype is outsourced with call centers in countries such as India or Mexico where wages are lower than they would be if it were done within Western Countries; this will also qualify businesses for tax savings, payroll contributions, etc.

While these are some examples of larger companies that outsource, many small and medium-sized companies use outsourcing as well.

 

Types of Outsourcing Services

outsourcing providers

Professional Outsourcing

The category of professional outsourcing encompasses all specialized services that are needed by companies that cannot perform them internally. These services include everything from legal to, accounting and consulting, translation, and more.

Multi-Sourcing

Another way to combine the services you outsource is through multi-sourcing. Multi-sourcing is a process in which you combine several services into one to get the best of both worlds.

This means that instead of hiring someone for translation, accounting, and consulting separately, you hire them together at a discounted rate.

IT Outsourcing

IT outsourcing goes a step further than professional outsourcing and is exclusively for technology services. IT service providers handle everything from systems design to software development, data analytics, infrastructure management, application development, networks operations, etc.

Process-Specific Outsourcing

Process-specific outsourcing is the process of contracting a company or individual to handle specific tasks that are needed by your business. This outsourced service could be anything from accounting to customer care.

Here are some examples:

Accounting: You outsource your accounting process to a professional company that handles the tedious, time-consuming tasks of bookkeeping and tax return services. They take care of everything from payroll deductions to managing budgets and more.

Customer Support: You outsource customer support for your business by hiring an outsourced call center service provider who will answer your customers’ questions and handle all of their complaints.

Data Entry: You need to enter a lot of data into your system, but don’t want to spend time doing it yourself? Contact an outsourced company that can take care of this for you in exchange for a negotiated amount.

Business Process Outsourcing (bpo)

Business process outsourcing is the act of turning over any business-related processes to a third party, including some or all parts of your company’s operations.

Common examples are customer service, back office, payroll processing, and accounting services.

This type of outsourcing can be beneficial because it frees up time for your in-house staff so that they can focus on more important tasks.

Process-specific outsourcing is the process of contracting a company or individual to handle specific tasks that are needed by your business. This outsourced service could be anything from accounting to eCommerce support, and here are some examples:

Customer Support: You outsource customer care for your business by hiring an outsourced call center service provider who will answer your customers’ questions and handle all of their complaints.

Data Entry: You need to enter a lot of data into your system, but don’t want to spend time doing it yourself? Contact an outsourced company that can take care of this for you in exchange for a negotiated amount.

  • Business Process Outsourcing:

A usual type of outsourcing is called business process outsourcing (BPO). This type of service saves organizations from hiring more staff or building more space. Outsourcing tasks to a BPO company can also reduce an organization’s operating costs and increase its efficiency levels, making it a cost-effective business strategy for many companies.

Manufacturing Outsourcing

The manufacturing industry is constantly changing and it’s difficult to keep up with the latest developments. Outsourcing your production can help you stay ahead of the game, and not be left behind by competitors who are lapping you in terms of innovation.

How to minimize the risk of outsourcing

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It is important to understand the risks of outsourcing and figure out what you can do to minimize them. The first step is recognizing where the risk comes from – your employees, customers, or suppliers. Once you have identified which area there is in most need of attention, then strategically plan how to implement appropriate safeguards for each one.

You can minimize the risk of outsourcing by:

 
  • Having strong communication with your team members and setting clear expectations.
  • Making sure that you know who is responsible for what responsibilities, as well as making assignments to do so.
  • Developing an understanding of how each person works best in order to make the most of their abilities.
  • Maintaining a good relationship with your employees, customers, and suppliers.
  • Conducting regular internal audits on processes to make sure that the integrity of the system is maintained.
  • Improving systems for gathering and analyzing data to make the most informed decisions possible.
  • Developing a system of checks and balances to ensure that any potential risks are caught before it is too late.

 

Advantages of outsourcing

outsourcing

Reduced labor costs and overhead expenses

When you outsource you will change fixed labor costs to variable costs. This offers the flexibility of workforce management that exists to the contrary of in-house staff.

Outsourcing enables you to customize your service delivery requirements according to individual demands. Back – Office tasks normally come with their respective expense. Such as offices and their furniture or copying paper.

Remote teams include expensive equipment and software tools. If people supporting their work can remotely work at their companies you should cut most of your overhead costs by outsourcing some of the other non-core services or transferring some of them to remote working areas.

And that could lower cost and produce huge savings.

Control cash flow

When you outsource a fixed cost (a full-time salary) into a variable cost. This allows your business a way to free up its resources and invest in other parts. These funds could be put towards building marketing campaigns and products. Companies without excessively rigid fixed costs are flexible and adaptable quickly to the current market condition. Outsourcing services can eliminate needing to invest in infrastructure or technologies.

Increases efficiency

An increase in efficiency is one of the main reasons why so many companies are turning to outsource. There is a certain level of expertise that needs to be attained for the company and its employees to run smoothly.

A lot of these skills may only exist within one or two people at most on staff and if they were ever incapacitated there would be no way for the business to continue operating as normal. This problem can easily be solved with outsourcing by hiring an outsourcer who specializes in whatever task your particular company requires them for–this means you’ll never have any downtime because someone will always know what to do when things become hectic.

  • Increased efficiency through specialization: By splitting up tasks amongst different groups specializing in their respective field instead of one group focusing everywhere, you’ll be able to get more done with fewer people–which is a great way to increase efficiency.
  • Increased efficiency through flexibility: Let’s say one day your business needs an accountant and the next it needs a graphic designer–you can send out two different proposals (each tailored for their respective task) as opposed to sending them both at once which would mean that either they’re not qualified or something has gone wrong in production.

Increased efficiency by outsourcing management: A large portion of time spent on any job is usually devoted to managing employees who work there. By hiring someone else to manage those duties frees up more time for upper management and executives.

You’re able to focus on what matters

Outsourcing allows you to focus on running your business and doing the things that matter.

  • When you’re outsourcing, your company is free to focus on what it does best while entrusted with another business’s tasks–even if they are different than yours.
  • The more time and resources a company spends focusing on its own core services or products instead of trying to learn all about other people’s jobs will result in increased productivity for each department involved which means better financial results overall.

Disadvantages of outsourcing

outsourcing business

There are some disadvantages to outsourcing. It is difficult for the employer and employee, as they need to have a good relationship with each other for things to work out well. The language barrier can be an issue because you don’t know exactly what the person on the other side of your computer screen or phone wants to do.

Many of these disadvantages can be easily overcome if you working with the right partner and from a country that speaks English as a second language such as the Philippines.

There is a lot of benefits of outsourcing, but there are also some disadvantages.

You Lose Some Control

One is that you lose some control because the person in charge may not be as motivated or good at their job and it will reflect on your company. You can’t just fire them because they’re overseas so instead, you have to work with them until things start going well again.”

Time zone difference

“A second disadvantage is the time zone difference. It’s hard for people who live in different parts of the world to communicate back and forth when working together.”

Language barriers

The language barrier can also be an issue because you don’t know exactly what the person on the other side of your computer screen or phone wants to do. There is a big difference between knowing English and not understanding it, which usually leads to miscommunication.”

How to find the right outsourcing vendor

technology outsourcing

Everyone wants to work with the best service providers. This is no different when it comes to outsourcing, and finding an outsourcing company can be a difficult process without proper guidance. So if you are looking for help in this area, here’s what you need to know about finding out-source service providers:

  • Identify your business functions that could be outsourced
  • Choose whether or not they should perform those functions “in house” or by using external service provider(s)
  • Determine which outsourcing provider would provide both quality of service AND cost efficiency (and how much each will cost).

Ultimately, choosing the right partner requires knowledge on both fronts—the relevant technical expertise as well as being able to make an educated decision.

In order to find service providers that are best suited for your business, you’ll need to take into account several factors:

  • The size and scope of the outsourcing project
  • Whether or not the outsourcing provider is “offshore” (based in another country) or onshore (in the same country as you). This will affect cost efficiency as well as communication across cultures
  • How much control do they give over implementation details. Some service providers provide a “solution-as-a-service” and maintain complete control over how it gets implemented, while others allow businesses more say about what specific resources get used during each phase of developing their solution – this is important for those looking to build a partnership that is more tailored towards their needs

As you can see, outsourcing service providers are not like any other business relationship. There are many factors at play and choosing one requires time and research on your end of things. You should consult with friends or trusted sources who have previously worked with service providers before fully committing to anything. This way, you will be able to make an informed decision that best suits each unique situation because every outsourcing provider has its strengths and weaknesses so they need to match up perfectly with what customers need from them.

Why outsource to the Philippines

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Many business owners are outsourcing their customer service and other operational needs to the Philippines. Why exactly is this happening? The answer may surprise you if you’re not fully aware of all of the outsourcing’s benefits.

  • The outsourcing industry in the Philippines has grown exponentially over the past decade as many businesses have learned that it can save a significant amount on costs without sacrificing quality work, making it an attractive option for small businesses.

Another reason to outsource to the Philippines is that English is the second language which means outsourcing to this country offers you the opportunity for better communication with your overseas team.

  • The Philippines has a large, skilled workforce that is able to provide just about any service or product that you might need from customer service representatives and data entry operators through web design and development all the way up to manufacturing goods in their factories. This diversity allows companies looking for outsourcing options to find what they are looking for without going excessively international.

As well as these benefits, outsourcing workers are at least 40% cheaper than American labor rates when it comes down solely cost of living expenses such as food and housing costs (compared against average wages). You can also avoid needing sponsorship visas if you’re outsourcing work outside of North America which saves time and allows you to get started quickly.

Is outsourcing a good thing?

outsourcing

Outsourcing is beneficial on both ends of the spectrum, but only if it’s done correctly! If you have an established company that works well already then it may not be necessary to outsource at all – especially since they would need time and resources to transition from what they’re doing now.

On the other hand, if your business has been around for less than five years or aspires to grow into something much larger then outsourcing might make sense. It can also provide flexibility by allowing companies more opportunities while still completing their primary goal(s).

Conclusion

supply chain

In conclusion: we hope that after reading this blog post about outsourcing, you will have a better understanding of what it means as well as its benefits. No matter if you’re looking into outsourcing for yourself or just want some information on how others benefit from doing this practice – now you know all about it! We would love to hear any feedback or questions below in the comments!

The benefits of outsourcing are many and will vary depending on the service provider. A service provider should be chosen based not only on their cost structure but also the quality of service. When selecting a service provider it is important to consider how well they are suited for your business needs as well as what types of tasks would work best with outsourcing.

Outsourcing companies can provide a wide range of business functions such as customer service, back office, human resources, information technology, and many more to help give you a competitive advantage over your competitors.

Make sure you build a solid relationship with your BPO company and you are sure to be successful.

If you are interested in learning more about outsourcing we would love to talk with you!

Email us: info@mysourcesolutions.com or give us a call: 844-468-3330

About MySource Solutions

MySource outsourcing company is the leading provider of outsourcing services in North America.

We help companies reduce costs and increase their bottom line through our innovative solutions, which include a wide variety of business process outsourcing (BPO), customer service, back-office operations, and more.

Outsourcing services have become an increasingly popular choice for businesses looking to grow while maintaining control over their budget.

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