Outsourcing Firms Categories

Outsourcing firms provide specialized staff to help companies attain performance objectives. They are also called service providers or third-party providers. Multinational businesses may thus tie up with service providers for either individual processes or complete projects or overall operations.

  • Outsourcing Firms can be categorized in three areas. And these categories are:
  • Business Process Outsourcing (BPO) Firms involved in carrying out standardized procedures that can either be back office jobs like billing and purchasing; or front office related services like marketing, answering calls, technical support and other customer oriented work.
  • Knowledge Process Outsourcing (KPO) Firms require higher levels of participation from employees engaged in activities such as advanced research and analysis or technical tasks; and in general making decisions of a higher order than BPO work.

Information Technology Outsourcing (ITO) Firms handle processes that are usually overseen by the chief information officer of an organization.

Outsourcing Firms provide services for multinational companies who want to get some of their work done outside the company. It is not an easy job to look for a provider to handle core company functions. There are risks and benefits, advantages and disadvantages to outsourcing that a company must consider when looking for an outsourcing provider.

There are several kinds of services that outsourcing companies provide, which are very essential for the companies to understand. These types of outsourcing services are as follows:

1. Manufacturer Outsourcing Services

This kind of service has been around for many years and is a cornerstone of a large percentage of worldwide manufacturing. Manufacturers outsource production of part or all of their products to reduce costs, improve flexibility and increase the effectiveness of production processes. Most of these manufacturers outsource in an effort to remain competitive and maintain a steady work flow. Although turning to outsourcing does not immediately guarantee results for manufacturers, many choose outsourcing to improve their MRO (maintenance, repair and operations) strategy.

Quality issues and disruption of the production line are usually the common risks with this type of arrangement.

2. Process-Oriented Outsourcing Services

This is also known as Process-Specific Outsourcing. As the service name implies, the process-oriented outsourcing service relies on the process for its operation. Systematic procedural integrations are implemented by the company and the outsourcing providers. Communication and support are very essential in this kind of service so that both the company and the service provider can benefit.

3. Operational Outsourcing Services

This is the best option if a company is planning to outsource processes that involve operations. Both parties are given access to operational controls so that they can be more productive. This type of outsourcing is very common in the outsourcing industry. One of the most prevalent areas for this type of outsourcing is in maintenance and repair.

4. Outsourcing Professional Services

This is one of the most popular types of outsourcing models among Outsourcing Firms. Companies utilize this type of outsourcing to gain access to high quality professional resources as a fraction of the cost of local markets. This type of outsourcing makes use of information technology, internet communications and other means to enable remote collaboration and servicing of clients. Examples of this service are legal, accounting and purchasing.

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Source: Ezine@rticles

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