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About Outsourcing Services
Outsourcing refers to the practice of one company contracting
another to do certain types of work rather than using its own
internal resources. Outsourcing typically involves the transfer
of the management or day-to-day execution of an entire business
function to an external service provider. Three notable types of
outsourcing are application development, IT infrastructure
outsourcing, and business process outsourcing.
BPO - Business process outsourcing (BPO) is a form of outsourcing which involves the contracting of the operations and responsibilities of a specific business function to a third-party service provider. BPO is typically categorized into back office outsourcing - which includes internal business functions such as human resources or finance and accounting, and front office outsourcing - which includes customer-related services such as contact center services.
IT infrastructure - The sum of an
organization's IT related hardware, software, data telecommunication facilities, procedures and documentation. IT infrastructure outsourcers provide such activities as data center operations, network operations, backup and recovery services, and administration services.
application development - or software development, is the set of activities that results in software products. Software development may include custom development, maintenance, reengineering, porting, integration, and other tasks.
Other outsourcing activities include:
- software development
- software maintenance
- data storage management services
- system administration services
- end user support of desktop PCs, laptops, and handheld devices
- web site, or application hosting
Why Choose Outsourcing
There are a number of reasons that drive companies
to outsource some or many of the work activities. The list of
- Lower costs (or lower total costs). Sometimes achieved through lower wages costs, but also through economies of scale by providing the same service to multiple companies.
- Improve service. Often, better educated or skilled people perform the task, and thus perform it better.
- Obtain expert skills. An outsource firm is allegedly an expert in that particular activity, and thus should be able to do it better than the customer.
- Improve processes. Given that outsourcers are very experienced at a particular set of processes, they can help the customer to improve their processes.
- Improve focus on core activities. Outsourcing frees management from having to worry about the inner-workings of a non-core activity. The customer focuses on their core competence, the outsourcer focuses on theirs.
How to Choose an Outsourcing vendor
Experts point to the importance of investigating
vendors thoroughly before signing any contracts.
They recommend requesting documentation and
other information to substantiate strengths,
experience, and success in the following areas:
To withstand the fluctuation of the current
economy the provider should be well-funded and
have a wide client base across which to spread
costs. Organizations should ask themselves, "Is
there a chance this company will close its doors
within the next two years due to lack of
Years in business
While outsourced security services are fairly
new, security products and companies are not. A
provider with several years in the security
business offers valuable experience and
Clients should ask for biographies of personnel
managing the MSSP. Note background and
leadership skills, among other items. Effective
leaders are capable of motivating team members
to be disciplined and dedicated to the detailed
While investigating, organizations should ask
how long the average client relationship has
lasted and ask for comments from existing
customers regarding the services provided.
Clients may take note of comments from third
parties, such as analysts and industry trade
writers. However, this should not replace a
thorough, in-person investigation.
About Technology Evaluation Centers Inc.
Established in 1993, Technology Evaluation
Centers, Inc. (TEC) is the first web-native
technology research enterprise. TEC provides
decision support systems (DSS) that enable
stakeholders to objectively identify the
software products that best fit their company's
unique business and systems requirements, and
that contribute most effectively to superior