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Outsourcing vs Insourcing

Outsourcing vs Insourcing

Outsourcing

Outsourcing is the practice of getting certain business activities done by specialized service providers or third party vendors. Often, one chooses to outsource certain aspects of one’s business to be able to focus on more core aspects that can further growth. If we look at there are primarily two circumstances under which one outsources. One is when the job is so simple that they don’t need a lot of training. It’s very straightforward, and it’s repetitive in nature. For example, with platforms that require large volumes of images, often the requirements to capture and edit the image before it is ready for the web isn’t very high and doesn’t require photographers or retouchers who are extremely skilled or creative. Instead, the focus should be on finding photographers and image editors who can repeatedly do a similar task with minimal errors. Another is when the job is so complex that you can’t possibly hire someone to do it in-house, full-time for a reasonable amount of money. Example of a situation like this often arises when there is a need for a technical specialty in a field like finance or law.

Besides the above, businesses can also avoid large fixed costs and overheads with outsourcing processes not core to their business. This is particularly useful when there is variance in the workload as is often seen in e-commerce. Holiday season and sale times will always see a surge in the volume of images that go online and having outsourced partners to handle the increase in business is very useful.

Outsourcing of business activities to external specialized service providers allows to gain from the services and skills that would be difficult for the business to develop in-house due to manpower or financial restrictions or both. It helps to control costs, have access to the talented pool instead of hiring them at higher costs, It also helps to offer round the clock services across the borders without the need to have enough space. All these lead to free up the time to focus more on the core activities.

As per survey1 59% of the companies outsource their activities to reduce costs, 57%  to focus more on core strategies, 47% use it to resolve their capacity issues, 31% opt for it to have improved service qualities, 28% to have access to expert professionals, 17% use it control business environment and 17% use it for organisational transformation.

India leads as a top outsourced country based on financial attractiveness, availability of huge talent pool and the business environment scores followed by China, Malaysia, Indonesia, Brazil, Vietnam, Philippines, Thailand, Chile and Colombia.

It is quite common that when organizations start their journey, they manage all the core and non-core aspects of the business processes internally. But as they begin to grow, they reach a stage when more focus is needed for core aspects of the business. At this stage, the focus could be in terms of the devotion of more time, more resources, new technologies, and more investments. So, it becomes difficult for organizations to handle all the business operations on their own. Now, this is the time when they have to decide between setting up their in-house systems for managing all the business processes or allocate processes to external professionals. Opting for the right decision will depend on the setup, the culture of the company and the anticipated growth in the future.

‌The allocation of business processes has both pros and cons. Once the task is outsourced to a service provider, the responsibility of carrying out the tasks and maintaining the assets of the organization depends on the outsourced vendor, Here, the care should be taken to have someone to communicate the brand idea in a right way to the outsourced company to match the style of the company.

There are no set norms to decide on whether to keep the process in-house or to outsource. The decision should be taken carefully after segregating all the processes into core and non-core categories and careful analysis of core competencies and available resources of the organization. Additionally, some processes are temporary and should be outsourced instead of hiring in-house professionals.

However, prior to outsourcing any component of the business to a third-party vendor, it is essential to understand the advantages and disadvantages of both outsourcing and insourcing.

Insourcing

Business creates distinctive attributes defining a unique spot and a distinct customer base in the market to stand out from competitors. Such core competencies help to gain competitive advantage and thus, create a brand image. Core competencies are best created by businesses using internal resources. In-house processes allow a business to stay independent, flexible, updated, facilitates easier and flexible interaction besides reducing the cost outlay on logistics. It allows the project delivery timeframe to stay under control, enables to edit whatever and whenever the business wants to make any changes in the strategy. Inhouse activities provide an opportunity to learn and gain from the processes. It helps to have complete control over the brand. It helps to perform all the contract commitments better than compared to the outsourced partners, who for many reasons can have issues in delivering the commitment made at the time of contract due to changes in the political, geographical and financial states.

In-house employees are aware of all the aspects of the company and know exactly what is needed. They have a greater personal interest in making sure that the job is done right and will go the extra mile to provide exemplary service.

Combined perspective

There is no one-size-fits-all solution, so to keep things balanced companies do opt for a combination of both in-housing and outsourcing. Most of them retain the sensitive processes that need constant supervision to their in-house teams and outsource all the repetitive tasks required in large volumes to the third-party vendor. Sometimes very specific skill-sets are required to perform the particular task and once that task is complete the company may not require that specific skills again, so instead of in-house hiring, that particular work can be delegated to a third party will definitely make sense.

Outsourcing image editing processes

Images have the power to build success stories, but the majority of us are unaware of the effort that is put to showcase the impactful images using image editing solutions. Most of the companies require impactful visual content for their business and want the images to be edited perfectly but lack a proper resource or time to make it happen. This is where the idea of outsourcing of image editing works.

Outsourcing of image editing means taking the support of external image editing professionals to create magic through your visuals without having to spend too much time and effort over it yourself.

Most businesses, like e-commerce, fashion, real estate, automobiles, jewelry, weddings, bank on photo editing solutions to focus on other aspects of their business and let the professionals do the jobs which they are skilled for.

Some Image editing solutions that can be outsourced include photo retouching, restoring, color correction, improving background, adding or changing background effects, adding texts, enhancing and improving the quality of the images, adjusting color contrast, red-eye fix, dusting, masking, clipping path and lot more.

Outsourcing image editing work to professionals not only helps to save on time but also provides the finest quality of images, adding value that in turn helps attract new customers leading to business. Outsourcing image editing work also lets the business utilize their in-house team for some other core activities that cannot be outsourced to external professionals. 

Outsourcing to professional vendors leads to efficient output through quality improvement, proper time & employee management, cost cut and volume scale-up.

Building an in-house team requires dedication, patience and a clear-cut understanding of skills that a company would need as a going concern. While outsourcing is a more immediate cost-effective solution. 

Evolving E-commerce industry and outsourcing

With changing rules and regulations around proper compliance & implementation, evolving consumer preferences and competitive marketplaces, companies should focus on creating an innovative e-commerce solution to succeed. To adapt itself to such fast-evolving conditions, the companies should have the flexibility to make immediate changes in its workflow. Such kind of immediate adaptation is possible using an outsourcing team, as making changes in the inhouse team with evolving conditions is not impossible but it will require a huge financial investment. Besides, such changes will disrupt the prior setup of an in-house team or might make it obsolete leading to the restructuring of the company. To deal with disrupting evolution, outsourcing should be the best idea to opt for keeping the minimal sensitive processes in house.

 

Data source: .http://transcosmos.co.uk/blog/outsourcing-statistics/

 

 

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