How Outsourcing Works

Table of contents:

How Outsourcing Works
How Outsourcing Works

Video: How Outsourcing Works

Video: How Outsourcing Works
Video: How Does Outsourcing Work? 2024, December
Anonim

Outsourcing involves the transfer of a part of the functions (usually production) by an organization to another company that is better specialized in this area or has the best resources for this.

How outsourcing works
How outsourcing works

Instructions

Step 1

An organization wishing to delegate a certain part of its functions to another company draws up a list of transferred works with a detailed description of them. This stage requires a lot of attention, because the contractor organization is unlikely to perform the tasks that are not provided for here, but desirable for execution (even if they are not very significant). In any case, at no extra charge. At this stage, criteria can also be developed to assess the compliance of the hired company (potential contractor) with the assigned tasks.

Step 2

According to previously developed (or at least implicit) criteria, a specific performer is sought and selected.

Step 3

An outsourcing agreement (or a work contract) is concluded with the selected contractor, in which the list of works transferred by the customer company is displayed in detail, the required number of employees for its execution, as well as the requirements for each of them.

Step 4

The executing company then proceeds to find the necessary workers and prepare them to perform the assigned tasks. Depending on the complexity of the delegated work and the qualifications of the employees involved, such training may take from one week to a month. Nevertheless, the contractor spends much less time and resources on this than if the customer was engaged in this task on his own.

Step 5

When the involved employees are equipped with resources and are actually ready to perform the work handed over by the customer (within the framework of a contract or outsourcing agreement), the personnel goes to the site and starts performing their functions.

Step 6

After each reporting period, an information letter is drawn up containing information on the number of days worked (shifts, hours) for each employee. On the basis of this document, the customer and the contractor then draw up and sign an act of work performed, and separately the customer is invoiced for the work actually carried out under the contract.

Step 7

For outsourcing, as a rule, certain functions of an organization are transferred on the basis of a long (from one year or more) contract. For some reason, these functions are not profitable for the organization itself, or it simply does not have sufficient experience and / or resources for this. Although an enterprise using outsourcing becomes more dependent on the external environment, however, due to saving its costs and freeing up resources (labor, financial, material, information), the overall efficiency of the enterprise ultimately increases significantly. This allows the organization to develop promising areas of its business or focus on existing, but requiring more attention.

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