Outsourcing

and the 5 W’s of

Outsourcing
 TABLE OF CONTENTS

01 03
What is Outsourcing 5 W’s of Outsourcing

02 04
Benefits of Outsourcing Types of Outsourcing and
and Disadvantages of Sales Outsourcing – How
Outsourcing is it done?

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 OUTSOURCIN
G
“Outsourcing is a business practice in which services or job
functions are hired out to a third party on a contract or
ongoing basis..”
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 5 W’s of
02 Outsourcin
g

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2.1 Why Outsource?
• The reasons for outsourcing can vary
widely depending on the company's
objectives.

• Common reasons include cost savings,

access to specialized expertise,
improved efficiency, flexibility, and the
5 ability to focus on core competencies.
 OUR SOLUTION

FLEXIBITY GROWTH
Company can choose any Company can no longer
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on the expertise to constant growth

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 OUR SOLUTION

ACCESS TO TALENTS,
INNOVATION SKILL AND NEW
Improve performance by MARKET
With the help of BPO,
focusing on important company will have access to
matter talents or skills from
different nationality

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2.2 Who to Outsource
• Outsourcing involves hiring external
individuals or companies to perform tasks
or provide services that would traditionally
be handled internally.

• The "who" refers to the parties involved in

the outsourcing arrangement: the company
outsourcing the work (client), and the
external entity providing the services

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 Processes in choosing the Best Outsourcing
Company
1. Review the Website
-Get to know and understand how much
experience the outsourcer has in their
field, the quality of the services that they
offer and how responsive they are to
customers

3. Check their work

samples and contact
2. Find a Specialty in their references
your Industry -Ask for references before any agreement is
-When reviewing a provider’s website, look for finalized, because these will tell you much
certifications. If an industry body has awarded about the quality of service, how timely
them a certification, they are undoubtedly good deliveries are, and the nature of customer
9 they do.
at what support services.
 What to
2.3

OUTSOURCE
1. This refers to the tasks or services being
outsourced.

2. It could range from IT services and

customer support to manufacturing and
back-office functions like accounting and
human resources

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 1. IT Services: Outsourcing IT services such as software development,
website maintenance, network management, and cybersecurity can be
cost-effective and provide access to specialized expertise.

2. Customer Support: Many companies outsource customer support

functions, including call centers, email support, and live chat services, to
third-party providers who can handle customer inquiries efficiently.

3. Human Resources (HR): HR functions like payroll processing, benefits

administration, recruitment, and training can be outsourced to specialized
HR firms, allowing companies to focus on core business activities.

4. Accounting and Finance: Outsourcing accounting tasks such as

bookkeeping, financial reporting, tax preparation, and auditing can help
companies reduce costs and ensure compliance with regulatory
requirements.

5. Manufacturing and Production: Companies often outsource

manufacturing and production activities to third-party vendors,
particularly for labor-intensive or specialized processes.
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 6. Marketing and Advertising: Marketing services like
advertising campaigns, social media management, search
engine optimization (SEO), and content creation can be
outsourced to agencies with expertise in these areas.

7. Supply Chain Management: Outsourcing logistics,

warehousing, and distribution functions can help companies
optimize their supply chains, reduce costs, and improve
efficiency.

8.Data Entry and Administrative Tasks: Routine

administrative tasks such as data entry, document processing,
transcription, and virtual assistant services can be outsourced to
third-party providers, freeing up internal resources.

9. Research and Development (R&D): Companies may

outsource R&D activities, particularly for specialized projects
or when they lack in-house expertise in certain areas.

10. Legal Services: Legal tasks such as contract drafting,

intellectual property management, and regulatory compliance
12 can be outsourced to law firms or legal service providers.
 When to
2.4

OUTSOURCE
-Companies decide to outsource for various
reasons, including cost reduction, access to
specialized skills, scalability, and focus on
core activities.

-The decision of when to outsource depends

on the company's strategic goals, budget
considerations, and the availability of suitable
vendors.

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 Reasons why companies Outsource

Lack of in-house Cost reduction: Scalability:

expertise:
• When a company lacks the
necessary skills or expertise to
handle certain tasks
effectively, outsourcing to a
specialized vendor can be
beneficial.
• Outsourcing can often be a
cost-effective solution,
especially when labor costs
are lower in other regions or
countries
• Outsourcing allows
companies to quickly scale
their operations up or down in
response to fluctuating
demand without the need to
hire or lay off employees.

• This could include areas like

IT services, software
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development, or marketing.
 Reasons why companies Outsource

Improved efficiency: Focus on core activities:

• External vendors may have streamlined • By outsourcing routine or non-core tasks,

processes, best practices, and advanced companies can free up internal resources
technologies that can deliver better results to focus on core business activities and
compared to in-house operations. strategic initiatives.

• This can lead to increased productivity

and efficiency.

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 Where to
2.3

OUTSOURCE
• Outsourcing can happen domestically or
internationally.

• Offshore outsourcing involves hiring

vendors from other countries, while
onshore outsourcing involves working
with vendors within the same country or
region.

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 Common Outsourcing
Destinations
Offshore Locations: Offshore outsourcing involves hiring
vendors from other countries, often chosen for their lower labor
costs. Popular offshore destinations include:

India: Known for its large pool of skilled IT professionals and

English proficiency.

Philippines: A popular destination for customer service and

business process outsourcing due to its English-speaking
workforce.

China: Offers manufacturing capabilities as well as IT and

software development services.

Eastern Europe: Countries like Ukraine, Poland, and Romania

are gaining popularity for IT outsourcing due to their skilled
workforce and proximity to Western Europe.
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 Onshore Locations:
• Onshore outsourcing involves working with vendors within the
same country or region.

• While typically more expensive than offshore or nearshore

options, onshore outsourcing offers advantages such as closer
proximity, easier communication, and potentially better quality
control.

Common onshore destinations include:

United States: Particularly for specialized services, such as

software development and consulting.
Western Europe: Countries like the UK, Germany, and France
offer high-quality services but at a higher cost compared to
offshore destinations.

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 Thank you!
Prepared by:
Christopher Ticoy | MBA

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