Features of Outsourcing

1) Outsourcing implies contracting out

Outsourcing means sourcing from outside rather than performing it in-house or in the organisation on its own.

For example, Most businesses have recruited their own sanitation employees to maintain the neatness, cleanliness, and overall housekeeping of their facilities. That is, sanitation and housekeeping duties were carried out in-house.
However, many corporations have recently begun to outsource these tasks, i.e., they have entrusted other agencies to undertake these activities for their organisations on a contractual basis.

2) Non-core business activities are generally outsourced

Most organisations do not prioritise sanitation and cleaning. Of course, for municipalities and sanitation service providers, these tasks are important to their business. A hotel’s main activity is housekeeping. In other words, depending on the business a firm is in, some operations will be critical to its primary business purpose. Other actions may be seen as secondary or incidental to achieving the primary purpose.

For example, the goal of a school is to educate or develop children via academic and co-curricular activities. These actions clearly define the main activities. Running a cafeteria/canteen or a bookstore is not a school’s primary activity.

When organisations first begin to experiment with outsourcing, they may outsource solely non-core activities. However, as they gain experience managing interdependencies, they may begin to receive even fundamental functions provided by outsiders.

For example, a school may form a partnership with a computer training facility to provide computer education to its students.

3) Processes might be outsourced to a captive unit or a third party

This represents how a company can outsource part of its activities to captive and third-party service providers. A multinational corporation deals with a diverse range of products and markets. A variety of procedures, including requirements, selection, and training, may be outsourced. It will assist to reduce operating costs by avoiding duplication of work.