When did the outsourcing start?

Outsourcing

What is Outsourcing?

The term Outsourcing describes a corporate strategy in which individual services, sub-areas or business processes of a company are shifted to suppliers and are no longer provided or taken over by the company itself. This targeted use of upstream suppliers can often reduce costs in the areas of production, development and service.

Why is outsourcing important?

A benefit of the Outsourcing is the improvement of the strategic market position of one's own company. In this way, companies can concentrate on their core business through appropriate outsourcing measures and thereby realize cost advantages. It is precisely through the use of specialized service providers that cost savings and quality optimization, for example in production, can be achieved.

Last but not least, outsourcing enables the company to react quickly and flexibly to changes - for example, if the planning of materials management has to react to fluctuations in workload. However, this assumes that a company has up-to-date logistics and production concepts because the external service providers are integrated into the value chain. The basis of modern outsourcing is therefore an effective resource planning that begins in your own company. It is implemented using an Enterprise Resource Planning Tool (ERP) and also covers the areas of inventory management, financial accounting and payroll accounting. An ERP software serves as the organizational backbone of the company on which successful outsourcing can be built.

When does outsourcing make sense?

The basis of outsourcing decisions should be a profitability calculation in order to check the benefits of an outsourcing project. The implementation of such a calculation is complicated in practice, since not only the costs for services, but z. For example, the cost of completing a project must be taken into account.

Outsourcing can be useful, for example, if a company is to be made more flexible and geared towards its core business. Tasks that are expensive or that cannot be carried out efficiently are given to specialized service providers. Even fast-growing companies often consider outsourcing in order to avoid the time-consuming construction of their own processes.

When planning outsourcing, however, it is important that your own key competencies and technologies are not outsourced. Otherwise there is a risk that the company will become dependent on one of its service providers. This dependency can mean that economic or qualitative problems with a service provider also result in costs in your own company. Further risks of outsourcing can be a potential loss of knowledge in your own company or lack of data protection due to data access by a service provider.

What does outsourcing mean for employees?

The importance of outsourcing for employees depends on whether it is internal or external outsourcing.

In the case of the company-internal variant, tasks that were previously carried out in your own company are transferred to a subsidiary, for example. In contrast, with external outsourcing, a foreign company is entrusted with tasks. In the event that tasks are assigned to a third-party company, there is a risk that employees will be dismissed for operational reasons. This is i.a. possible when entire production areas are outsourced to countries with low wages. However, this scenario does not necessarily have to occur. External outsourcing, but also internal outsourcing, can relieve employees of the workload if they are, for example, at work. B. can devote more time to their core tasks again. In order to achieve such positive effects of outsourcing on employees, efficient resource planning should already exist within the company.

An example of this is the introduction of ERP software that is provided and supported by an external company. With such ERP software, inventory management, financial accounting or payroll accounting can be designed efficiently and automatically. ERP not only lowers costs in the company; Employees also have to worry less about repetitive routine work. This increases the motivation of the employees, the results become visible to the employees and the training of new colleagues is easier thanks to the ERP software.

However, the following applies to all outsourcing projects: The project should be communicated comprehensively and openly to employees through timely change management in order to prevent any rumors and maintain a good working atmosphere.

What is online outsourcing?

The internet-based version of outsourcing is known as online outsourcing. This includes, above all, the outsourcing of marketing services and IT tasks that are performed via the Internet. Examples include search engine optimization, web design and programming jobs as well as multimedia production. Online outsourcing is particularly attractive for start-ups and small and medium-sized companies that have little financial leeway themselves.