Outsourcing is concluding of a contract between two companies according to which the duty of fulfilling of certain processes for another company connected with its functioning are entrusted. Such cooperation is long-term and has significant differences from providing of service.
As a result of rational delegation of definite functions to outsourcing, a customer company can lower expenses considerably and raise effectiveness of its production. This service, as well as using of a time tracker, can save human, organizational and financial sources which can be directed to creating and developing of new business areas or focused on existing business spheres which need more attention.
Outsourcing is a useful tool for business functioning organizing, as, besides reducing of expenses it can:
- Offer an opportunity not to distract on secondary objectives and to be focused on company’s own development
- Exclude problems of staff personnel forming, as recruitment and monitoring of work effectiveness by using of a time tracker is provided by outsourcing company.
- Increase flexibility of a company in case of crisis situation
- Provide high quality of used services or equipment
- Necessity of acquisition of equipment or software is also excluded.
Types of outsourcing
Outsourcing can be roughly divided into following types:
- Production outsourcing. Delegating of objectives connected with production. For example, printing of promotion leaflets by advertising companies is delegated to printing offices.
- IT-outsourcing. Delegating of duties connected with programming, developing of software, equipment attendance, hosting services, supporting of time tracker software, etc.
- Outsourcing of business-processes. Secondary business-processes are transferred to outsourcing companies.
- Knowledge management outsourcing. It concerns those kinds of activities which need a profound analysis or a specific processes elaboration which affect significantly on management decision making. For example, knowledge management outsourcing is provided by companies which develop, install and support time trackers.
Personnel outsourcing is transferring of all organizational processes connected with human recourses management to outsourcing company. Outsourcing companies in this case provide recruitment of personnel permanently or on a temporary basis. There is another type of personnel outsourcing which is called outstaffing. It differs from outsourcing in that outstaffing is actually staff leasing. In outstaffing, employees conclude labor contracts with an outstaffing company but not with a customer company. Time tracking and effectiveness assessment are also provided by an outstaffing company.