What is outsourcing?

The Outsourcing or process also known in Portuguese as “Terceirização”, consists in obtaining goods and services through an external supplier. If we analyse the origin of the word in English, we verify the junction of two terms: "out" meaning outside and "source" meaning source. In other words, to resort to the outside to satisfy a need. This practice began to be used as a business strategy in 1989 and has gained prominence in the business world as a way of reducing costs and increasing the efficiency of companies. Used as a response to the performance of any function, today companies frequently resort to this practice to meet the needs established both by their rapid growth and by the appearance of new business areas, such as the technological areas. The services used in an outsourcing regime may be the most varied and normally serve to fulfil needs during certain periods of time.

Types of Outsourcing

There are various types of services that can be contracted in an outsourcing regime. The offer is, in fact, unlimited. From human resources, financial services, marketing and sales services, administrative work, legal support, logistics, information technology (IT) to computers, practically every type of service is found in outsourcing companies. The supply is plenty and the demand is increasing. And why is that? It is cheaper. It is efficient. It requires less effort and fewer resources from companies.

Advantages and disadvantages

As in everything, there are pros and cons. As we mentioned above, for companies there are some obvious advantages in hiring specialised services from abroad:

• Less human resources are required from the company
• Less effort in forming teams
• Less effort in hiring
• Increased competitiveness
• Identify the tasks that you can delegate to an outsourcing company. Either because it is an area that is not your core business, or because it is a new area in expansion in your company, that you can benefit from the know-how of an external company.
• Do a market research. Within your needs, check which companies are providing the service you want, trying to find the best solution for your business.
• Transition process. Prepare all departments within your company for this transition process.
• Follow-up. The evaluation of the whole process over time is fundamental. This way, adjustments can be made whenever necessary in the way the whole process is being conducted. Always keep the dialogue open with the partner company. After all, everyone is working towards a common goal.
• Increase in production
• More specialised work
• Team flexibility

As the other side of the coin, there are also some disadvantages to this type of procedure:

• Loss of know-how within the company
• RGPD problems
• Poor team cohesion
• Lack of identity with company history, culture, and mission on the part of outsourced workers
• Lack of motivation of workers

Planning is fundamental

When a new strategy is implemented in the company, planning is fundamental. It is important that some important steps are fulfilled so that the whole outsourcing process reflects a final gain for the company. Here are some points to bear in mind if you are thinking of implementing this strategy in your company. As previously mentioned, there are several areas that can be outsourced, as well as countless reasons why companies turn to third parties to find answers to some of their day-to-day challenges.

At Fed Finance, we can be your ally to find the right staff for your company. Every day, we develop methodologies and tools that allow you to select the profiles that best meet your needs. If you need a recruitment partner, contact us.