Outsourcing Business Model

The Outsourcing Business Model – Why You Need to Understand It

by Moin Uddin Ahmed Tipu
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It is important for you, as a businessperson operating in today’s world, to understand the outsourcing business model. This is a model in which you work with external contractors (as opposed to employing people in the conventional sense) to get work done. In some cases, the external contractors you get to work with under this model turn out to be folks who are in the same country with you. In some other cases, the external contractors you get to work with under the outsourcing model turn out to be in other countries, or even in other continents thousands of miles away.

 

The Outsourcing Business Model

Now as mentioned earlier, there are many reasons as to why you need to understand the outsourcing business model as a businessperson operating in today’s world. Those include the facts that:

 

 Through Outsourcing, You Can Cut Costs

This is, for instance, the scenario in cases where you manage to outsource projects to countries where labor costs are extremely low. It is, for instance, possible to get a programmer in India to do for you work at a cost that turns out to be just 10 percent of what an American programmer would have done the same work for.  And nowadays, through the freelance work sites which link up small businesses with outsourcing partners abroad, you can get this sort of thing done, however small your business may be.

 

Through Outsourcing, You Can Get Time-Sensitive Tasks Done Fast

There are times when you have tasks that have to be completed within given time-frames, and when it becomes clear that you and your full-time staff cannot possibly get those tasks done on time. In such scenarios, you can benefit from the outsourcing model –as the whole thing has developed to a point where you can get almost anything done by external contractors, especially if it is back office work.

 

Through Outsourcing, You Can Get Complex Tasks Done Well

There are times when you may be faced with tasks that are so complex that neither you, nor the people in your office can handle it competently. Chances are, however, that there is someone out there who can get such tasks done, and the way to hook up with that person turns out to be through the freelance work sites that facilitate outsourcing relationships.

 

Through Outsourcing, You Can Enhance Your Competitive Advantage

As we noted earlier, you have a chance to substantially make cuts on your operational costs through outsourcing. Once you manage to do this, you have a free hand to go ahead and reduce the cost of your products, or the rates you charge for your services. This should translate into highly enhanced competitive advantage, seeing that customers/clients are likely to patronize businesses where they are charged less. At the very least, even if you don’t plan to actively outsource work, you should nonetheless understand the outsourcing business model, as it can affect your business’ competitiveness. You should make an effort to understand where your competitors are outsourcing tasks to, what they are being charged to get those tasks done and so on. Otherwise you will be missing out on crucial business intelligence.

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