Outsourcing: The term Outsourcing came into existence in 21st Century and became famous in America. In outsourcing a company may involve into an agreement for work that can be exchanging of services and payment with another company. Insourcing is the opposite of outsourcing. Outsourcing can be of various types like Business process outsourcing, network outsourcing, services outsourcing, logistics outsourcing, project outsourcing, HR outsourcing etc. The emergence of outsourcing was from manufacturing industry, but since the 21st century outsourcing services moved to development companies in developing countries. Nowadays, Outsourcing is a term that should not be ignored; we should take it seriously as it is a great business opportunity. For this it is necessary to understand the benefits and the risks of outsourcing.
Benefits of Outsourcing:
• Budget flexibility and control.
• Reduces Capital and operating Expenses
• Reduces burden to hire and train staff
• Client can get the services from anywhere in the world
• Deliver high value services
• Reduced end-customer prices
• Cost Reduction and cost savings
• It cut costs such as labor cost, recruitment costs, office renting cost and training cost
• Can get better customer support
• Revenue and profit increases
• Can improve the software development Quality
• Strengthen the competitiveness of the enterprise
Reasons for Software Outsourcing:
There are many reasons why companies want to outsource their work. The most common reasons are that they want to reduce their software development cost, strengthen core competencies, and widen economies of scale and so on. Their main low cost destinations include China and India. Earlier people hesitated to outsource due to distance restrictions and time but now breakthrough of communication technologies has eliminated this obstacle. Cheaper, more convenient, and more advanced technologies made the global communication as easy as face to face.
Article written by the OTS solutions’s Sales Team, OTS Solutions a leading Software Outsourcing Company providing Software Outsourcing Services in web, mobile, porting, testing and on many more across the globe.