What is Outsourcing?

Our company is an outsourcing solutions provider based in the Philippines. Before you consider using our services, it is essential that you understand what outsourcing is and know some of the 'buzz' words used in the outsourcing industry. This knowledge will help you decide if outsourcing is something you ought consider for your own business.

Outsourcing Definitions

Outsourcing: the transfer of the management and/or day-to-day execution of a business process to an external service provider. Another term that is usually used to refer to outsourcing is Business Process Outsourcing or BPO. In any outsourcing agreement, there are at least two parties involved:

• The Client - the company that decides to have an external party perform one or more of its business processes.
• The Provider - the company that executes the business process on behalf of the client.

This is the most direct outsourcing agreement. In larger or more complex outsourcing constructions, there may be one or more brokers in between the client and the provider(s). This broker acts as a middleman and its services are commonly to find the right providers on behalf of the client and take over some of the operational management and responsibilities. MicroSourcing is an outsourcing solutions provider, not a broker.

Classifying Outsourcing by Business Process

If we look at the business processes being outsourced then we can identify three main categories:

• Information Technology Outsourcing (ITO)
  Outsourcing the design, development, implementation and management of IT products and processes to a third party provider
  
  
• Voice Outsourcing
  Outsourcing call center functions to a third party provider such as customer support and telemarketing
  
  
• Non-Voice Outsourcing
  Business processes that do not fall under ITO or Voice Outsourcing. Examples are accounting, marketing, sales, research and development and administrative tasks
  
  

MicroSourcing is an Information Technology Outsourcing (ITO) Provider, although our outsourcing models could be applied to any type of business process.

Classifying Outsourcing by Geographic Distance

Besides the type of business process that is being outsourced, we can also look at the geographic distance between the client and the provider:

• Inshoring/Onshoring
  Client and provider are in the same country. An example would be a company based in New York outsourcing to a company based in Boston.
  
  
• Nearshoring
  Client and provider are in different countries but at a relatively short distance from each other. A good example would be a US-based company outsourcing to a Mexico-based provider.
  
  
• Offshoring
  Client and provider are in different countries and at a considerable distance from each other. An example would be a US-based company outsourcing to a Philippines-based provider.
  
  

MicroSourcing is based in the Philippines and most of our clients are based in the USA, Canada, the UK, Australia and New Zealand. As such, we are an Offshore Information Technology Outsourcing Solutions Provider (Offshore ITO).

Now that you know what outsourcing is, we can have a look at the benefits of outsourcing