In recent years, companies have re-dimensioned and redefined their strategies and their business management models, to face the economic crisis and constant market changes. From SMEs with limited resources to large companies with rigid and hierarchical structures, the main goal remains to remain competitive on the market. With the aim of saving money, without sacrificing quality and professionalism, the current trend is to outsource all activities that require excessive investment or that are marginal with respect to the company’s core business.
In quality management according to ISO 9001, outsourcing is defined as any business process – research and development, production, marketing, personal management and so on – entrusted to an external company.
Outsourcing can take place at different levels, ranging from the simple purchase of a service or product to the use of contracts and subcontracting, up to the establishment of a relationship of trust and collaboration with external companies for the execution of activities that require specific assets, for which the client does not have the resources to make the necessary investment.
The main reasons that push a company to outsource one or more functions are due to the lack of internal resources such as know-how and / or adequate technologies or related to the need to increase production efficiency and reduce production costs.
The main advantages that outsourcing can bring are the following:
SPECIALISED PERSONNEL
The job market is changing faster and faster. This entails for companies to have more and more qualified, specialized and constantly updated personnel. Most European SMEs often do not have the human and financial resources to manage particular types of personnel. With outsourcing, companies can rely on partners who have specialized and constantly updated staff, freeing themselves from the resulting management and administration costs.
SAVINGS ON TECHNOLOGIES AND INFRASTRUCTURE
For companies it may not be sustainable to purchase equipment and / or software to be used occasionally. A company specialized in supplying a service or product can easily re-enter the resulting investments. The company, relying on a specialized firm, can in fact free himself from investments that are unsustainable for him and at the same time take advantage of the most performing technologies, software, and equipment, increasing his competitiveness and improving his final product and / or service.
SAVINGS OF FIXED COSTS AND FOCUS ON CORE BUSSINESS
Thanks to the outsourcing, companies can change the cost management structure, by transforming fixed costs into variable costs. In this way they can also invest their available resources in their core business and therefore focus on improving their activities and distinctive skills.
MORE FLEXIBILITY AND OPTIMIZATION OF RISK MANAGEMENT
The external company, while receiving support from the client company, is fully evaluated by the client about the results obtained and the problems that may arise during the process. In fact, it is the external company that assumes the business risk and responsibility for its work.
As a result, the client company increases in its flexibility, developing a greater ability to cope with changes in sales volume and / or service delivery.
CONCLUSIONS
Outsourcing consists in entrusting specific business processes to external companies. The reason for making this decision derives in most cases from the unavailability of the resources necessary to invest in a certain asset or from the choice to leave the execution of activities deemed marginal by the company itself to external suppliers.
The resulting advantages translate into the construction of strategic partnerships, greater efficiency and flexibility, speed of service and optimization of both strategic and operational times and costs.