July 2010

Companies that choose to outsource part or all of their functions have taken a lot of criticism for the downturn that the American economy has experienced. This is understandable, since whenever a company does this, it deprives people of some job opportunities. Those opportunities are passed on to someone else. However, there are some doubts on whether or not outsourcing is an entirely negative practice.

An increasing number of companies have begun to outsource back office and support functions to outsourcing firms, taking advantage of the reduction in operating expenses. These are the functions that are critical to the business, but are not directly related to its core function. These include payroll, accounting, and recruitment. Most of these are sensible and can easily be handled by good outsourcing companies.

Newsletters and mailed catalogs were a common means of marketing prior to the Internet, and were an excellent way to inform potential customers of new products or deals. With the new age of communications technology, an email marketing campaign has become yet another tool in the arsenal of a business.

The choice to outsource is one that has multiple considerations before it can be made. There is the potential for easing financial pressure on a company to form or maintain a department that could be handled elsewhere. There is the chance to tap into other locations for expertise in an area where the company doesn’t have proficiency.

Business process outsourcing has come a long way from its origins in contact centers, data entry, and low-level technical support. The services provided by these companies have expanded into other areas, taking up more and more critical aspects of business without taking over the core competencies of client companies. One area in which offshore outsourcing companies have managed to grow is in the field of back office outsourcing.

Business process outsourcing has been around for more or less a decade now, and it has established itself as a cost-cutting, value-added practice for various companies. Offshore outsourcing companies primarily focus their offers on this, though there have been some that have decided to expand their services.