What are the features of outsourcing?

Features of Outsourcing- Features of outsourcing can be explained as under:

1.It involves contracting out

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Today many companies have started outsourcing the activities of maintaining neatness, cleanliness and overall housekeeping of their premises to outside agencies on a contractual basis. Another example can be inverter manufactures and suppliers who hire specialized mechanical firms to attend their customers. Outsourcing is a process of getting work from specialists outside the business firm.

2. Oftenly Non-core Business Activities are Outsourced by the Business Firm

Generally, a business concern outsources only the non-core activities. Once the outsourcing experience proves successful, it may start getting even the core activities performed by the outsiders.

3. Processes may be Outsourced to a Captive Unit or a Third Party

A business organisation can outsource a number of processes such as recruitments, selection, training, record and payroll, management of accounts receivables and payables, customer support/grievances to the third party service providers. There are three of third party service providers in outsourcing:

What do you mean by horizontal communication? Discuss its merits and importance.

(i) Capative BPO unit

A large multinational company may set up own inhouse unit to perform some activity for its affiliates all over the world. Example: General Electric is the largest captive BPO unit for providing certain services to the parent company in US and in other countries.

(ii) Horizontals

These are the firms which specialise in some processes such as accounting and finance and provide their services to a wide base of clients, cutting across industries.

(iii) Verticals

These may be the firms which specialise in one or two industries and scale up to doing a number of processes from non-core to core.