In recent years has been a significant increase in the incidence of information system (IS) outsourcing. Technological uncertainly, cost reduction, the need to concentration in the core business, and the increasing quality and competition among a growing cadre of service providers (e.g.) are often discuss as key outsourcing motivators. Cadre is a core group who is a controlling or representative group at the center of an organization.
IS outsourcing involves multiple facets, including the initial decision, choice of governance structure and the management of the ongoing relationship.
Outsourcing
"Outsourcing" is: "A company or person that provides information; to find a supplier or service, to identify a source". It is very important to be clear about what is meant by outsourcing. Outsourcing essentially refers to how things are done rather than what is done. It describes how for example IT services are obtained; not what the services are.
Very simply outsourcing can be defined as a process in which a company delegates some of its in-house operations/processes to a third party. Thus outsourcing is a contracting transaction through which one company purchases services from another while keeping ownership and ultimate responsibility for the underlying processes. The clients inform their provider what they want and how they want the work performed. So the client can authorize the provider to operate as well as redesign basic processes in order to ensure even greater cost and efficiency benefits.
Although the above definition of outsourcing may seem very similar to contracting, it is to be said that contracting and outsourcing are in no way related. Generally in contracting the ownership or control of the operation or process being contracted is with the parent company, whereas in outsourcing the control of the process is with the third party instead of the parent company. So in other words, outsourcing can be defined as phenomena in which a company delegates a part of its in-house operations to a third party with the third party gaining full control over that operation/process.
One way of looking at it is that outsourcing is just a name for already existing practices. Services such as, bureau services, contract programming and project management have been outsourced for a long time. In its present meaning, however, outsourcing refers to a greater level of handing over ownership and/or managerial control than has before been the case.
Companies turn to resources outside their organizational structure usually to save money and/or make use of the skilled professionals. For instance, a company might outsource its IT management because it is cheaper to contract a third-party to do so than it would be to build its own in-house IT management team. Or a company could outsource all of its data storage needs because it is easier and cheaper than buying and maintaining its own data storage devices. A business might also outsource its human resource tasks to another enterprise instead of having its own dedicated human resources staff.
Insourcing
Insourcing often involves bringing in specialists to fill temporary needs or training existing personnel to perform tasks that would otherwise have been outsourced. An example is the use of in-house engineers to write technical manuals for equipment they have designed, rather than sending the work to an outside technical writing firm. In this example, the engineers might have to take technical writing courses at a local college, university, or trade school before being able to complete the task successfully. Other challenges of insourcing include the possible purchase of additional hardware and/or software that is scalable and energy-efficient enough to deliver an adequate return on investment (ROI).
Insourcing can be viewed as outsourcing as seen from the opposite side. For example, a company based in Japan might open a plant in the United States for the purpose of employing American workers to manufacture Japanese products. From the Japanese perspective this is outsourcing, but from the American perspective it is insourcing. Nissan, a Japanese automobile manufacturer, has in fact done this.
Views
As a student, if I were invited by the Dean of the Institute of Computing to attend a seminar-workshop on information systems planning with some of the faculty members. In one of the sessions, a discussion of outsourcing came up. You have been asked to present your evaluation about outsourcing the information systems functions of the school. I would choose outsourcing because of its lower wages and operating costs both contributed to these reduced costs.
These lower costs were appealing because they greatly improved the profit margins for any organization. However, outsourcing is now gaining in popularity for a variety of other reasons. While cost reduction is still a primary advantage, other elements such as access to industry experts, a larger workforce and more flexible options are being embraced as welcomed advantages offered by outsourcing.
Outsourcing must be done carefully, systematically, and with explicit goals. Companies that rush into outsourcing without fully understanding what they hope to gain may find themselves mired in a contractual battle with a chosen vendor or the recipient of services that worsen rather than improve. Sensible reasons to consider outsourcing include both strategic and tactical concerns on both a department and organizational level.
Outsourcing might be justifiable for a department with high costs that cannot be reduced or a lack of competency in specific areas. Organizational needs that generate consideration of outsourcing include the ability to compete globally with global services or relief from financial pressures achieved through immediate cost saving.
Outsourcing is not an excuse to wash management's hands of a poorly managed, costly, or misunderstood function. Understand the costs of a function and manage it effectively before evaluating its potential for outsourcing. Otherwise, you are probably deciding to outsource for the wrong reason, you may be giving the outsourcing vendor gains you could have reaped, and you may be starting a relationship that is destined to fail.
Organizations should consider (or reconsider) the overall merits of selective outsourcing every three to four years. Revisiting outsourcing may be particularly relevant under changing market conditions or when internal, industry, or technology changes have occurred.
Use a Methodical Approach
The process of deciding whether outsourcing is warranted involves numerous steps or phases. These are: identifying requirements; preparing and distributing a request for proposal (RFP); examining proposals; evaluating vendors; negotiating contracts; and implementing outsourcing. Adopt a methodology that describes the various steps to be performed and lays out the project plan necessary for a thorough evaluation. Just as applications development activities should be guided by a written, explicit methodology, the effort to consider and possibly implement outsourcing should be systematically conducted and documented.
The various phases are as follows:
• Planning Phase. The objectives and scope of the outsourcing idea are defined and the feasibility of outsourcing is determined before a decision to proceed. The effort is planned in terms of time, budget and resources needed.
• Analysis Phase. Baselines are determined and the service levels required of vendors are specified. Relationships between the information system function(s) to be outsourced and other functions that will remain in-house are also clarified so that contracts with vendors are certain to include proper interfaces with in-house services. The request for proposal is developed, responses are collected from vendors and analyzed, and a vendor is chosen.
• Design Phase. Negotiations proceed with the vendor and a contract is developed and signed.
• Implementation Phase. The transition from in-house provision of services to outsourcing is made.
• Operations Phase. The outsourcing relationship with the vendor is managed and any maintenance or changes in the outsourcing relationship are negotiated and implemented.
• Termination Phase. At the end of the contracting period the decision is made to negotiate another contract with the vendor or a new vendor, and the cycle begins again. Alternatively, a decision is made to bring the function back inside the organization.
As you evaluate your choices and decisions in outsourcing different components of your operations, you will need to consider the advantages of outsourcing. When done for the right reasons, outsourcing will actually help your company grow and save money. There are other advantages of outsourcing that go beyond money. Here are the top seven advantages of outsourcing.
1. Focus On Core Activities
In rapid growth periods, the back-office operations of a company will expand also. This expansion may start to consume resources (human and financial) at the expense of the core activities that have made your company successful. Outsourcing those activities will allow refocusing on those business activities that are important without sacrificing quality or service in the back-office.
Example: A company lands a large contract that will significantly increase the volume of purchasing in a very short period of time; Outsource purchasing.
2. Cost And Efficiency Savings
Back-office functions that are complicated in nature, but the size of your company is preventing you from performing it at a consistent and reasonable cost, is another advantage of outsourcing.
Example: A small doctor’s office that wants to accept a variety of insurance plans. One part-time person could not keep up with all the different providers and rules. Outsource to a firm specializing in medical billing.
3. Reduced Overhead
Overhead costs of performing a particular back-office function are extremely high. Consider outsourcing those functions which can be moved easily.
Example: Growth has resulted in an increased need for office space. The current location is very expensive and there is no room to expand. Outsource some simple operations in order to reduce the need for office space. For example, outbound telemarketing or data entry.
4. Operational Control
Operations whose costs are running out of control must be considered for outsourcing. Departments that may have evolved over time into uncontrolled and poorly managed areas are prime motivators for outsourcing. In addition, an outsourcing company can bring better management skills to your company than what would otherwise be available.
Example: An information technology department that has too many projects, not enough people and a budget that far exceeds their contribution to the organization. A contracted outsourcing agreement will force management to prioritize their requests and bring control back to that area.
5. Staffing Flexibility
Outsourcing will allow operations that have seasonal or cyclical demands to bring in additional resources when you need them and release them when you’re done.
Example: An accounting department that is short-handed during tax season and auditing periods. Outsourcing these functions can provide the additional resources for a fixed period of time at a consistent cost.
6. Continuity & Risk Management
Periods of high employee turnover will add uncertainty and inconsistency to the operations. Outsourcing will provided a level of continuity to the company while reducing the risk that a substandard level of operation would bring to the company.
Example: The human resource manager is on an extended medical leave and the two administrative assistants leave for new jobs in a very short period of time. Outsourcing the human resource function would reduce the risk and allow the company to keep operating.
7. Develop Internal Staff
A large project needs to be undertaken that requires skills that your staff does not possess. On-site outsourcing of the project will bring people with the skills you need into your company. Your people can work alongside of them to acquire the new skill set.
Example: A company needs to embark on a replacement/upgrade project on a variety of custom built equipment. Your engineers do not have the skills required to design new and upgraded equipment. Outsourcing this project and requiring the outsourced engineers to work on-site will allow your engineers to acquire a new skill set.
The Advantages Of Outsourcing Benefits Administration
In this economy, companies should be looking for new yet proven ways to save money.
PRLog (Press Release) – Jun 09, 2009 – It is common knowledge that for most employers, payroll processing is the biggest expense they incur on a regular basis. However, benefits administration and processing comes in at a close second in terms of employer cost. Indeed, as health care benefits become more and more complex to deal with, companies are spending increasing amounts of time processing them for their employees. When payroll processing and other human resources tasks are added to the mix, it's easy to see why benefits administration can be such a burden on midsized companies.
To deal with this growing problem, many companies are choosing to outsource their benefits administration. Doing so allows their existing human resources staff to perform other critical functions, and has a host of other advantages for companies looking to increase their efficiency and lower their costs. There is little doubt that benefits administration outsourcing will continue to rise in popularity; as noted by Norman LeClair, CEO of Corban OneSource (An HR Outsourcing Company for midsized businesses http://www.corbanone.com), "Outsourcing benefits administration has become very popular for companies with 100 to 1000 employees because it is proven to save money while increasing the customer service to employees." Below, we take a closer look at some of the compelling advantages to outsourcing benefits administration.
Reduce Costs
By outsourcing their benefits administration, companies can stand to cut costs and save a great deal of money. As things like health benefits become more and more convoluted to manage, keeping a human resources staff trained and up-to-date on performing these operations can be a costly proposition. Human resources personnel who have in depth experience in benefits administration typically come with very high salary requirements, increasing the operating costs for small to midsized companies enormously.
Rather than keep trained personnel on staff to tackle daily benefits administration tasks, many companies are discovering that outsourcing these functions saves them a lot of money in the long run. The firms that handle such tasks specialize in benefits administration processing, and typically cost a company far less than keeping in-house personnel up-to-date and fully trained. Since benefits administration has become so complex, most companies normally need at least one employee fully dedicated to handling it; for a lot less money, it can hire an outside agency to do the same work.
Free Up Resources
Obviously, human resources departments do much more for an average copany than benefits administration. They handle payroll processing, hiring and a slew of other critical tasks. However, benefits administration can take up an inordinate amount of employees' time and resources; other tasks may fall by the wayside. By outsourcing benefits administration, though, companies can free up existing HR personnel and allow them to get the important, day-to-day work done in a timely manner. This increases overall efficiency and improves employee morale considerably.
Improve Customer Service To Employees
When a company's human resources department is bogged down by the myriad complexities involved in benefits administration, it is less capable of providing excellent customer service to the organization's employees. Human resources should always be available and able to handle all sorts of employee concerns; they should be viewed and looked upon as a place for employees to receive the information that they need. By outsourcing benefits administration, companies can free up a lot of their HR personnel's time, allowing them to increase their level of customer service to employees in general.
Streamline The Benefits Process
The typical staff at a benefits administration outsourcing firm is comprised of highly trained and very experienced specialists who know precisely how to handle all aspects of the benefits administration process. Therefore, these companies can help organizations find many ways to streamline their benefits process, making it more amenable and accessible to each and every employee - from the bottom up. When the benefits process is truly streamlined, it allows a company's employees to take full advantage of those benefits - and keeps them up to date on what they are entitled to and how to receive those benefits.
Outsourcing Benefits Administration: A Great Choice
As demonstrated above, there are many compelling reasons for outsourcing benefits administration. With the highly competitive nature of today's business world, companies must continually strive to cut costs and improve efficiency. The increasingly complex nature of today's benefits administrations works against those goals, bogging companies down in red tape and subjecting them to countless errors and expenses. Removing those functions from the shoulders of existing HR personnel frees them up to focus on what truly matter: providing excellent customer service to the company's employees.
Companies that are struggling in today's worrisome economic climate are likely to find that outsourcing their benefits administration gives them the boost needed to keep them afloat. After all, being flexible and willing to adapt to changing times is critical to remaining a viable operation. Outsourcing benefits administration is just one other way of doing that with skill and ease.
The success of an outsourcing company depends on mainly three factors. Firstly a proper executive-level support from the client’s organization for the outsourcing mission. Secondly, there should be frequent communication between the client organizations (that is hiring services) and the service providing firm or company. And last but certainly not the least a lot depends on the client's ability to manage and handle its service providers.
References:
http://www.cyfuture.com/definition-of-outsourcing.htm
http://repositorium.sdum.uminho.pt/bitstream/1822/950/1/Outsource.pdf
http://whatis.techtarget.com/definition/0,,sid9_gci1185946,00.html
http://www.businessforum.com/woj01.html
http://operationstech.about.com/od/officestaffingandmanagem/a/OutSrcAdvantg.htm
http://www.articlesbase.com/outsourcing-articles/meaning-of-outsourcing-580687.html
http://www.prlog.org/10254091-the-advantages-of-outsourcing-benefits-administration.html
IS outsourcing involves multiple facets, including the initial decision, choice of governance structure and the management of the ongoing relationship.
Outsourcing
"Outsourcing" is: "A company or person that provides information; to find a supplier or service, to identify a source". It is very important to be clear about what is meant by outsourcing. Outsourcing essentially refers to how things are done rather than what is done. It describes how for example IT services are obtained; not what the services are.
Very simply outsourcing can be defined as a process in which a company delegates some of its in-house operations/processes to a third party. Thus outsourcing is a contracting transaction through which one company purchases services from another while keeping ownership and ultimate responsibility for the underlying processes. The clients inform their provider what they want and how they want the work performed. So the client can authorize the provider to operate as well as redesign basic processes in order to ensure even greater cost and efficiency benefits.
Although the above definition of outsourcing may seem very similar to contracting, it is to be said that contracting and outsourcing are in no way related. Generally in contracting the ownership or control of the operation or process being contracted is with the parent company, whereas in outsourcing the control of the process is with the third party instead of the parent company. So in other words, outsourcing can be defined as phenomena in which a company delegates a part of its in-house operations to a third party with the third party gaining full control over that operation/process.
One way of looking at it is that outsourcing is just a name for already existing practices. Services such as, bureau services, contract programming and project management have been outsourced for a long time. In its present meaning, however, outsourcing refers to a greater level of handing over ownership and/or managerial control than has before been the case.
Companies turn to resources outside their organizational structure usually to save money and/or make use of the skilled professionals. For instance, a company might outsource its IT management because it is cheaper to contract a third-party to do so than it would be to build its own in-house IT management team. Or a company could outsource all of its data storage needs because it is easier and cheaper than buying and maintaining its own data storage devices. A business might also outsource its human resource tasks to another enterprise instead of having its own dedicated human resources staff.
Insourcing
Insourcing often involves bringing in specialists to fill temporary needs or training existing personnel to perform tasks that would otherwise have been outsourced. An example is the use of in-house engineers to write technical manuals for equipment they have designed, rather than sending the work to an outside technical writing firm. In this example, the engineers might have to take technical writing courses at a local college, university, or trade school before being able to complete the task successfully. Other challenges of insourcing include the possible purchase of additional hardware and/or software that is scalable and energy-efficient enough to deliver an adequate return on investment (ROI).
Insourcing can be viewed as outsourcing as seen from the opposite side. For example, a company based in Japan might open a plant in the United States for the purpose of employing American workers to manufacture Japanese products. From the Japanese perspective this is outsourcing, but from the American perspective it is insourcing. Nissan, a Japanese automobile manufacturer, has in fact done this.
Views
As a student, if I were invited by the Dean of the Institute of Computing to attend a seminar-workshop on information systems planning with some of the faculty members. In one of the sessions, a discussion of outsourcing came up. You have been asked to present your evaluation about outsourcing the information systems functions of the school. I would choose outsourcing because of its lower wages and operating costs both contributed to these reduced costs.
These lower costs were appealing because they greatly improved the profit margins for any organization. However, outsourcing is now gaining in popularity for a variety of other reasons. While cost reduction is still a primary advantage, other elements such as access to industry experts, a larger workforce and more flexible options are being embraced as welcomed advantages offered by outsourcing.
Outsourcing must be done carefully, systematically, and with explicit goals. Companies that rush into outsourcing without fully understanding what they hope to gain may find themselves mired in a contractual battle with a chosen vendor or the recipient of services that worsen rather than improve. Sensible reasons to consider outsourcing include both strategic and tactical concerns on both a department and organizational level.
Outsourcing might be justifiable for a department with high costs that cannot be reduced or a lack of competency in specific areas. Organizational needs that generate consideration of outsourcing include the ability to compete globally with global services or relief from financial pressures achieved through immediate cost saving.
Outsourcing is not an excuse to wash management's hands of a poorly managed, costly, or misunderstood function. Understand the costs of a function and manage it effectively before evaluating its potential for outsourcing. Otherwise, you are probably deciding to outsource for the wrong reason, you may be giving the outsourcing vendor gains you could have reaped, and you may be starting a relationship that is destined to fail.
Organizations should consider (or reconsider) the overall merits of selective outsourcing every three to four years. Revisiting outsourcing may be particularly relevant under changing market conditions or when internal, industry, or technology changes have occurred.
Use a Methodical Approach
The process of deciding whether outsourcing is warranted involves numerous steps or phases. These are: identifying requirements; preparing and distributing a request for proposal (RFP); examining proposals; evaluating vendors; negotiating contracts; and implementing outsourcing. Adopt a methodology that describes the various steps to be performed and lays out the project plan necessary for a thorough evaluation. Just as applications development activities should be guided by a written, explicit methodology, the effort to consider and possibly implement outsourcing should be systematically conducted and documented.
The various phases are as follows:
• Planning Phase. The objectives and scope of the outsourcing idea are defined and the feasibility of outsourcing is determined before a decision to proceed. The effort is planned in terms of time, budget and resources needed.
• Analysis Phase. Baselines are determined and the service levels required of vendors are specified. Relationships between the information system function(s) to be outsourced and other functions that will remain in-house are also clarified so that contracts with vendors are certain to include proper interfaces with in-house services. The request for proposal is developed, responses are collected from vendors and analyzed, and a vendor is chosen.
• Design Phase. Negotiations proceed with the vendor and a contract is developed and signed.
• Implementation Phase. The transition from in-house provision of services to outsourcing is made.
• Operations Phase. The outsourcing relationship with the vendor is managed and any maintenance or changes in the outsourcing relationship are negotiated and implemented.
• Termination Phase. At the end of the contracting period the decision is made to negotiate another contract with the vendor or a new vendor, and the cycle begins again. Alternatively, a decision is made to bring the function back inside the organization.
As you evaluate your choices and decisions in outsourcing different components of your operations, you will need to consider the advantages of outsourcing. When done for the right reasons, outsourcing will actually help your company grow and save money. There are other advantages of outsourcing that go beyond money. Here are the top seven advantages of outsourcing.
1. Focus On Core Activities
In rapid growth periods, the back-office operations of a company will expand also. This expansion may start to consume resources (human and financial) at the expense of the core activities that have made your company successful. Outsourcing those activities will allow refocusing on those business activities that are important without sacrificing quality or service in the back-office.
Example: A company lands a large contract that will significantly increase the volume of purchasing in a very short period of time; Outsource purchasing.
2. Cost And Efficiency Savings
Back-office functions that are complicated in nature, but the size of your company is preventing you from performing it at a consistent and reasonable cost, is another advantage of outsourcing.
Example: A small doctor’s office that wants to accept a variety of insurance plans. One part-time person could not keep up with all the different providers and rules. Outsource to a firm specializing in medical billing.
3. Reduced Overhead
Overhead costs of performing a particular back-office function are extremely high. Consider outsourcing those functions which can be moved easily.
Example: Growth has resulted in an increased need for office space. The current location is very expensive and there is no room to expand. Outsource some simple operations in order to reduce the need for office space. For example, outbound telemarketing or data entry.
4. Operational Control
Operations whose costs are running out of control must be considered for outsourcing. Departments that may have evolved over time into uncontrolled and poorly managed areas are prime motivators for outsourcing. In addition, an outsourcing company can bring better management skills to your company than what would otherwise be available.
Example: An information technology department that has too many projects, not enough people and a budget that far exceeds their contribution to the organization. A contracted outsourcing agreement will force management to prioritize their requests and bring control back to that area.
5. Staffing Flexibility
Outsourcing will allow operations that have seasonal or cyclical demands to bring in additional resources when you need them and release them when you’re done.
Example: An accounting department that is short-handed during tax season and auditing periods. Outsourcing these functions can provide the additional resources for a fixed period of time at a consistent cost.
6. Continuity & Risk Management
Periods of high employee turnover will add uncertainty and inconsistency to the operations. Outsourcing will provided a level of continuity to the company while reducing the risk that a substandard level of operation would bring to the company.
Example: The human resource manager is on an extended medical leave and the two administrative assistants leave for new jobs in a very short period of time. Outsourcing the human resource function would reduce the risk and allow the company to keep operating.
7. Develop Internal Staff
A large project needs to be undertaken that requires skills that your staff does not possess. On-site outsourcing of the project will bring people with the skills you need into your company. Your people can work alongside of them to acquire the new skill set.
Example: A company needs to embark on a replacement/upgrade project on a variety of custom built equipment. Your engineers do not have the skills required to design new and upgraded equipment. Outsourcing this project and requiring the outsourced engineers to work on-site will allow your engineers to acquire a new skill set.
The Advantages Of Outsourcing Benefits Administration
In this economy, companies should be looking for new yet proven ways to save money.
PRLog (Press Release) – Jun 09, 2009 – It is common knowledge that for most employers, payroll processing is the biggest expense they incur on a regular basis. However, benefits administration and processing comes in at a close second in terms of employer cost. Indeed, as health care benefits become more and more complex to deal with, companies are spending increasing amounts of time processing them for their employees. When payroll processing and other human resources tasks are added to the mix, it's easy to see why benefits administration can be such a burden on midsized companies.
To deal with this growing problem, many companies are choosing to outsource their benefits administration. Doing so allows their existing human resources staff to perform other critical functions, and has a host of other advantages for companies looking to increase their efficiency and lower their costs. There is little doubt that benefits administration outsourcing will continue to rise in popularity; as noted by Norman LeClair, CEO of Corban OneSource (An HR Outsourcing Company for midsized businesses http://www.corbanone.com), "Outsourcing benefits administration has become very popular for companies with 100 to 1000 employees because it is proven to save money while increasing the customer service to employees." Below, we take a closer look at some of the compelling advantages to outsourcing benefits administration.
Reduce Costs
By outsourcing their benefits administration, companies can stand to cut costs and save a great deal of money. As things like health benefits become more and more convoluted to manage, keeping a human resources staff trained and up-to-date on performing these operations can be a costly proposition. Human resources personnel who have in depth experience in benefits administration typically come with very high salary requirements, increasing the operating costs for small to midsized companies enormously.
Rather than keep trained personnel on staff to tackle daily benefits administration tasks, many companies are discovering that outsourcing these functions saves them a lot of money in the long run. The firms that handle such tasks specialize in benefits administration processing, and typically cost a company far less than keeping in-house personnel up-to-date and fully trained. Since benefits administration has become so complex, most companies normally need at least one employee fully dedicated to handling it; for a lot less money, it can hire an outside agency to do the same work.
Free Up Resources
Obviously, human resources departments do much more for an average copany than benefits administration. They handle payroll processing, hiring and a slew of other critical tasks. However, benefits administration can take up an inordinate amount of employees' time and resources; other tasks may fall by the wayside. By outsourcing benefits administration, though, companies can free up existing HR personnel and allow them to get the important, day-to-day work done in a timely manner. This increases overall efficiency and improves employee morale considerably.
Improve Customer Service To Employees
When a company's human resources department is bogged down by the myriad complexities involved in benefits administration, it is less capable of providing excellent customer service to the organization's employees. Human resources should always be available and able to handle all sorts of employee concerns; they should be viewed and looked upon as a place for employees to receive the information that they need. By outsourcing benefits administration, companies can free up a lot of their HR personnel's time, allowing them to increase their level of customer service to employees in general.
Streamline The Benefits Process
The typical staff at a benefits administration outsourcing firm is comprised of highly trained and very experienced specialists who know precisely how to handle all aspects of the benefits administration process. Therefore, these companies can help organizations find many ways to streamline their benefits process, making it more amenable and accessible to each and every employee - from the bottom up. When the benefits process is truly streamlined, it allows a company's employees to take full advantage of those benefits - and keeps them up to date on what they are entitled to and how to receive those benefits.
Outsourcing Benefits Administration: A Great Choice
As demonstrated above, there are many compelling reasons for outsourcing benefits administration. With the highly competitive nature of today's business world, companies must continually strive to cut costs and improve efficiency. The increasingly complex nature of today's benefits administrations works against those goals, bogging companies down in red tape and subjecting them to countless errors and expenses. Removing those functions from the shoulders of existing HR personnel frees them up to focus on what truly matter: providing excellent customer service to the company's employees.
Companies that are struggling in today's worrisome economic climate are likely to find that outsourcing their benefits administration gives them the boost needed to keep them afloat. After all, being flexible and willing to adapt to changing times is critical to remaining a viable operation. Outsourcing benefits administration is just one other way of doing that with skill and ease.
The success of an outsourcing company depends on mainly three factors. Firstly a proper executive-level support from the client’s organization for the outsourcing mission. Secondly, there should be frequent communication between the client organizations (that is hiring services) and the service providing firm or company. And last but certainly not the least a lot depends on the client's ability to manage and handle its service providers.
References:
http://www.cyfuture.com/definition-of-outsourcing.htm
http://repositorium.sdum.uminho.pt/bitstream/1822/950/1/Outsource.pdf
http://whatis.techtarget.com/definition/0,,sid9_gci1185946,00.html
http://www.businessforum.com/woj01.html
http://operationstech.about.com/od/officestaffingandmanagem/a/OutSrcAdvantg.htm
http://www.articlesbase.com/outsourcing-articles/meaning-of-outsourcing-580687.html
http://www.prlog.org/10254091-the-advantages-of-outsourcing-benefits-administration.html
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