The outsourcing

Did you ever think about making a subcontract? Nowadays it is frequent that companies outsource certain productive functions. This has many advantages for the company and can be a significant saving. We explain to you what is the outsourcing and its main forms and characteristics.

The subcontracting and outsourcing of processes

A company can assign certain resources and tasks processes to another external company more specialized to carry out works or projects. This strategic tool seeks to delegate non-critical processes to your business to a specialized supplier. Thus, achieving greater efficiency.

Benefits of the outsourcing

• Cost savings.
• Focus on the core business.
• Cost restructuring.
• Management capacity: Helps to redefine the company.
• Improves the quality of the products.
• Access to talent: provision of highly trained personnel from another company.
• Innovation Capacity: Allows the company to have the best technology without training or changing personnel.

Externalization

One of the most frequent contracts when externalizing services is outsourcing. It is widely used for hiring the services of marketing, accounting, computing services… This contract consists of the hiring of external companies to perform secondary functions that complement the main functions of the company. These activities are not strategic for the company. Its outsourcing allows to save costs of equipment and personnel.

It also prevents the organization from having to specialize in a specific activity. Its duration is usually several years and requires a great commitment to the company.

You can just hire the staff. In this case, resources will be provided by the client (installations, hardware and software). Or you can hire the staff as well as their resources. This will depend on the resources that the company owns for certain functions and the potential profitability of each option. Next, we will define the characteristics of this agreement and the existing types of outsourcing.

Characteristics of the outsourcing

• Flexible: Due to its generally extended duration we must be flexible with this process.
• You must define its duration, as it can be changeable.
• It saves costs to the company.
• This contract must define in detail the work to be done, because it can be very variable.
• Detail how and when the subcontracting contract will end.
• Both parties must specifically agree on their responsibilities and obligations in the agreement.

Types of outsourcing

• Offshoring: Whose specialty lies in the subcontracting of foreign companies to reduce costs.
• In-house: It is subcontracting a company that provides services within the facilities of the client company.
• Off-site: When the subcontracted company provides services from its own facilities.
• Co-Sourcing: When the subcontracted company adds value, sharing the risks with their customers.

If you have questions about the outsourcing contract or have already decided to make your own document, contact our specialized attorneys. They will advise and resolve all your doubts.