How to consider insource business and outsourcing business
How to consider insource business and outsourcing business, Some operations are more cost-effective to insource (in-house production), while others are more efficient to outsource (outsource).
Please refer to the following as one of the criteria for judging in-house production or outsourcing.
The business that recommends insourcing
- Professional work that should accumulate knowledge in-house
- The core business of a company that wants to invest resources
- Management decision-making work that requires strategy formulation
A business that recommends outsourcing
- General businesses that can handle manuals
- The non-core business that does not generate profit
- Non-professional work that does not require strategy formulation
Businesses suitable for outsourcing
The work that recommends outsourcing has been mentioned above, but the following work is specifically suitable for outsourcing.
- IT-related business
- Personnel operations
- Accounting / legal/general office work
- Call center operations
Difference between outsourcing and dispatch
Both outsourcing and dispatching are common in that they outsource operations to external resources.
However, the easy-to-understand difference is that outsourcing pays for “businesses and deliverables”, while dispatching pays for “people who request business”.
There is also a difference in the form of the contract, and outsourcing concludes a contract with the providing company to outsource the business itself, but in the case of dispatching personnel, the dispatching company and the dispatched company conclude a “labor dispatch contract”.
In the following cases, we recommend using outsourcing rather than dispatching personnel.
- A manual has been established, but a lot of resources must be devoted to it.
- A business that occurs regularly
- From a management point of view, there is no problem even if you do not accumulate know-how in your company.
- A business that requires a lot of capital investment such as when developing a new business
Differences between outsourcing and shared services
Shared service is a type of outsourcing, and is a method of consolidating common operations such as corporate functions in one place within a group company.
As diversified management progress and the number of group companies increases, everyday operations such as personnel, general affairs, and legal affairs may have overlapping costs such as personnel costs and system costs.
Therefore, by introducing shared services and consolidating those operations in one place, it is possible to improve the cost performance of the entire group of companies.
Types of outsourcing
In addition to shared services, there are four types of outsourcing: “co-sourcing,” “multi-sourcing,” “crowdsourcing,” and “offshore outsourcing.”
Co-sourcing
Refers to a contract in which both parties work together by allocating not only the resources of the outsourced company but also the outsourcer’s business resources.
companies to accumulate specialized know-how within the company, so more and more companies are now concluding co-sourcing contracts.
Multisourcing
Multisourcing refers to selecting outsourced companies for each field, rather than outsourcing various operations to a specific company.
If the business is outsourced to a specific company, cost management may be neglected or some businesses may lack expertise, but by introducing multi-sourcing, it is possible to eliminate such disadvantages. It is now possible.
Offshore outsourcing
Offshore outsourcing refers to outsourcing operations mainly to overseas companies such as Vietnam and India.
There are many jobs in the IT field, and despite the highly specialized work, the labor cost is low, so it is a feature that you can request at a low cost.
