The role of an outsourcing company

Dec 19, 2014SHORE Blog

A corporation that does business process outsourcing (BPO) for other companies is known as an outsourcing company. Outsourcing is the practice of having components or functions of one company done externally by another company. When we talk about outsourcing of business processes, the processes can be done by the outsourcing company not only outside source corporation’s physical premises within the same country, but also as far outside as another country within another continent. When the outsourcing company is located outside the country of the company that needs the services, the process is also known as offshoring.

The global outsourcing market is huge and its revenues in 2013 exceeded three hundred billion U.S. dollars. That figure shows that many companies of all sizes from all over the world are outsourcing some of their services and that there are thousands of outsourcing companies – also of all sizes – providing these services.

An outsourcing company can provide any number of services. Some outsourcing companies focus on particular specializations such as animation, medical transcription, legal services or finance and accounting. Other outsourcing companies are generalists in that they provide a wide array of services such as call center services, business process outsourcing services (BPO is used both to describe the industry and the range of nonvoice services) and information technology and other professional services. Outsourcing companies also cater to different industries. Virtually all industries use outsourcing companies, including telecommunications, finance, retail, healthcare, manufacturing, logistics, media and many more. Still another way to categorize outsourcing companies is by which models of outsourcing these companies offer. The most common model of outsourcing is the traditional one called comprehensive outsourcing. Other models are staff leasing or co-sourcing, facilities outsourcing, and build-operate-transfer (BOT).

Companies that outsource their services do so for various reasons such as to reduce operating costs and to have an outsourcing company undertake time-consuming functions. Outsourcing companies naturally benefit as well from this business as offshoring provides employment and is a major contributor to national economies of the outsourcing companies’ countries.