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Glossary

What is Outsourcing?

Outsourcing is one such practice where businesses hire third-party companies to perform their business processes. An outsourcing service provider, also called a third-party provider, is a company that arranges for its employees or computer technology to perform tasks or perform services either at the hiring company's headquarters or at an external location. There are a large number of operations and business functions that companies outsource nowadays. 


These business operations majorly include programming and application development, accounting, human resources, training, information technology services, IT support, customer services, payroll processing, and many others. 


How does outsourcing work? 


When you outsource a business process, you must stay clear with the responsibilities. To begin with, decide on the business process you wish to outsource. Discuss it with your business partner and talk about the responsibilities, costs, business functions, or operations to be handled or managed by the outsourcing partner. Sign the agreement and maintain the clauses. It will help both you and your outsourcing partner to be clear about the expectations and requirements. Signing an agreement would also help in avoiding any dispute in the future. 


Types of outsourcing 


In general, there are a few different types of Call Center Outsourcing based on the distance between the two parties. For example, some are more cost-effective than others depending upon the type of process.


1. Onshore Outsourcing- Onshore outsourcing is the practice of obtaining services from someone outside of your company but within your nation. It refers to outsourcing work or business processes to lower-cost locations within the country. 


2. Offshore Outsourcing- An offshore outsourcing agreement involves obtaining services from people or companies outside the country. This type of outsourcing helps businesses to outsource from countries that offer lower-cost services. 


3. Nearshore Outsourcing- As the name suggests, nearshore outsourcing involves getting work done or services performed by local staff in neighboring countries rather than in an organization's home country. Software development, technical support, and call center jobs are examples of the types of jobs most often outsourced in this type of outsourcing. 


Some outsourcing agreements can vary depending on the type of business process to be outsourced. For specific tasks, such as content creation or programming, companies can hire freelancers on a job basis. Companies outsourcing their entire IT department, however, will require a long-term relationship with clearly defined responsibilities.

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