Types of Outsourcing Explained

Friday 09/07/2021 - 5:36

Through outsourcing, you can find a wide range of services to improve operations at your company without needing to hire more employees. This may enable you to cover skills that your current workforce doesn’t possess. As you have a huge number of options, it’s a good idea to understand the different types of outsourcing before you get started.

Types of Outsourcing Explained

IT Outsourcing

It’s also possible to contract a provider just for IT. If you have specific IT needs or you are a small business, this could be a better option. Even startups need some IT support to maintain security, keep licenses up to date, and manage their networks, and this is an affordable way to receive those services. With IT outsourcing, you can receive support with anything from infrastructure to app development.

Business Process Outsourcing

One of the most common types of outsourcing is business process outsourcing (BPO). You can use BPO to handle your more mundane business activities, such as administration, correspondence, and scheduling. You can also receive customer services and lead generation through BPO.

Project Outsourcing

It’s possible to outsource all aspects or even just a portion of a project to a provider. This is a common strategy when a business lacks the time, skills, or funds to complete a project. Some types of project outsourcing include website redesign, creation of a large piece of content, and marketing campaigns.

Process-Specific Outsourcing

With process-specific outsourcing, you contract a provider for a specialist service — it can even be something quite niche. There are three types of process-specific outsourcing.

The first is knowledge process outsourcing (KPO). This is for improving products and services through research and data analysis.

The second is legal process outsourcing (LPO), which can cover regulatory compliance, litigation, and other legal needs.

Finally, there’s recruitment process outsourcing (RPO), covering everything related to recruitment. You can receive support for job postings, shortlisting applications, and evaluating candidates.

Multi-Sourcing

Another way to combine the services you outsource is through multi-sourcing. Typically, multi-sourcing provides you with a mix of IT and other business functions. It’s usually more suitable for large companies that want to outsource a variety of IT operations and infrastructure to different vendors. However, multi-sourcing is also a good option for any business that wants access to top specialists, is looking for an outcome-based approach, and wants transparency around its IT projects.

Bear in mind, though, that you’ll need to have to have a strategy in place before you get started with multi-sourcing.  For instance, you need to know what metrics matter to your business and you’ll need to have a system of governance.

 

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