Outsourced Companies: U.S. Businesses that Use Outsourcing 2023
Everything You Wanted to Know About Outsourced Companies: U.S. Businesses that Outsource 2023
In the business and technology world, Outsourcing is a widespread practice. Outsourcing gives companies access to expertise and resources they would otherwise not have. It also allows for cost savings in areas such as labor costs, operational costs, and taxes. As of 2023, many companies across the United States outsource some or all of their operations to third parties outside their own country or continent. This page will explore what outsourced companies do, which ones are considered outsourced firms in the United States, how they go about undertaking it, illustrations from big-name companies like Google and Apple using this approach successfully, benefits related with outsourcing operations, tips on how to select the right outsourcing company, and much more.
Outsourced companies rely on outside resources for certain aspects of their business operations. This can include customer support services, marketing campaigns, or IT-related responsibilities such as development and maintenance. By trusting on third-party enterprises, these outsourced firms gain access to a larger pool of expertise, allowing them to stay competitive in their respective industries while saving money through reduced operating expenditures and taxes. Outsourcing is a path for businesses to save cash by not having to pay employees directly but still benefiting from the expertise of professionals outside their company when needed.
What is the Biggest Outsourcing Company?
The biggest outsourcing companies have the most clients and offer numerous services. The largest outsourcing company in the U.S. is Accenture, with a market capitalization of $135 billion as of 2023. It works mainly with Fortune 500 companies and offers services; consulting, digital transformation, technology implementation, analytics & insights, human resources management solutions, and more. Other outsourced companies include Cognizant, IBM, Oracle Corporation, TCS, Wipro, and Capgemini. These companies make up much of the global market share for outsourced services and products.
Examples of Outsourcing in Companies
An example of Outsourcing could be how Apple outsources its customer service operations. They engage another firm to handle all calls, emails, and online chat inquiries from customers worldwide looking for assistance with their products or services. Walmart regularly outsources certain aspects of its business, such as customer service, I.T. support, software development, product design, and even some marketing activities. This process allows them to focus on core competencies while benefiting from outside expertise when needed.
Benefits of Outsourcing in Companies
- When companies outsource their business activities, they often experience cost savings. The third parties they employ are usually experienced professionals who are very intelligent and experienced in their fields of work. They typically charge much less than it would cost the company to hire someone internally to do the same job.
- Another benefit of Outsourcing is the amount of work the company can do without having to do it. When a company outsources the work of its I.T. department, for example, this means that all the software and their systems are immediately up to date and up to the standard of an outsourced I.T. firm.
- Alternatively, cost savings is time savings. Companies that outsource have more time to focus on other, more important things than mundane tasks. They have more time to decide on innovative products, ideas, and services to offer consumers. This practice often results in companies that are ahead of their competitors in the market and innovative, new ways to bring products and services to the public.
- Companies that outsource their business activities possess much more expertise than they would have if they did not. Hiring someone to do a job for you may cost more upfront, but it will save you precious time and resources down the road because they can help with other projects and situations in the future.
- Another benefit associated with Outsourcing is that the company can focus on what it does best while outsourcing the other parts of its business. This allows for a more efficient business because everything is streamlined, and all operations work harmoniously together, each doing what it does best.
- Another benefit is the ability to outsource certain aspects of a company to other countries. While specific jobs may not be able to be outsourced, most parts of the companies are outsourced to countries with lower costs and labor prices.
- Outsourcing also gives a company access to recent technology they would not otherwise have access to. Suppose a company needs to use a specific computer program or needs the services of a software developer. In that case, it might have more success trying to find someone available in an outsourcing market like India or the Philippines. While these are the most popular outsourcing countries, nearshore software development, is just as effective while overcoming the regular issues that come with offshore outsourcing. This exercise diversifies its options for Outsourcing and increases its chances of finding professionals that specialize in the field it requires.
- Finally, outsourcing work also helps keep businesses running 24/7 since they can have teams working around the clock if necessary. This exercise makes it easier for them to respond quickly and efficiently to changing customer demands or market trends.
Frequently Asked Questions About Outsourced Companies: U.S. Businesses that Outsource 2023
How do Companies go about Outsourcing?
Organizations go about outsourcing through multiple channels.
- Outsourcing is usually a part of business evolution. The initial step to Outsourcing is deciding on some regions of the company where some outsourced functions will benefit the company the most. Companies should be realistic about their budget and timeframe for outsourcing certain aspects of their business. They should also consider what resources they have available, whether it be time or funds.
- Once a company has decided on which tasks it wants to outsource, it usually starts with the easier ones and moves up to more challenging ones as time goes on and budgets are made available for more projects.
- Companies may find that many aspects of a business are outsourced. They should consider factors such as customer service, I.T. support, software development, product design, and even some marketing activities. Companies should also consider outsourcing specific tasks to outside agents, such as connecting with influential people in the market they sell their products or services.
Outsourcing Examples Of Successful Companies
Large companies in the United States and all across the world are using Outsourcing as a way to increase their competitive advantage over other organizations in their field. This proceeding allows them to focus on their core competencies while benefiting from experts who come in and care for the different aspects of their business. The following are some outsourcing examples in big companies around the world as of 2023:
Google: Google has become one of the most successful companies in recent years mainly due in part thanks its strategic use of outsourced services such as software development, I.T. support, product design, and even some marketing activities — all sourced from third-party vendors across different countries including India, China, and Ireland among others. By outsourcing these services, they can focus on core competencies while benefiting from outside experts in specific fields if needed (1).
“Even Google’s top-notch team of 89,000+ in-house employees doesn’t have all the answers all of the time. And that’s one of the reasons the company uses contractors — a LOT of contractors. As Bloomberg reports, 2018 marked the first year Google’s contract workers outnumbered their direct employees.”
Alibaba: Alibaba is a company primarily known for its online marketplaces, but it has become one of the most profitable corporations in the globe thanks to its strategic use of Outsourcing. One of Alibaba’s most significant advantages is its ability to utilize different services. It allows them to increase their reach and visibility over time by securing more and more partnerships and resources as they expand worldwide. Alibaba has been known to utilize external companies for numerous projects related to web hosting solutions, cloud computing projects, custom website designs & developments. They use offshore developers who provide complete cycle software development services at an affordable price.
WhatsApp: WhatsApp is another example of a big company owned by American company Meta Platforms taking advantage of outsourcing services to widen its competitive advantage and scale up operationally. With a strong emphasis on technology and high-quality software development, they recommend their customers excellent products at competitive prices while they continue to grow exponentially year after year.
Skype: Skype is another example of a company that has successfully used Outsourcing to its advantage. By leveraging third-party vendors from India and other countries, Skype could develop its technology faster and more efficiently than if it had done it in-house. This allowed them to quickly become one of the most popular communication tools, with millions of users utilizing their services daily.
Slack: Slack is a US cloud-based company with a set of collaboration tools, which allows for real-time messaging and file-sharing capabilities among its users. Although Slack was initially developed for professional communications, it developed as a community platform. They have taken full advantage of outsourced software development companies offshore that provide cost-effective solutions while maintaining high-quality standards at all times as part of their business strategy’s long-term success. By doing this, Slack has expanded rapidly into different markets worldwide while still providing top-notch customer service through expert teams outside U.S. borders but working exclusively for Slack customers’ needs 24/7.
MySQL: MySQL has been using outsourced services since 2014, when Oracle Corporation acquired Sun Microsystems Inc., thus reaching the MySQL database management system product line. After the acquisition decision, they used external I.T. contractors for some tasks, such as bug fixing and testing, instead of hiring permanent employees to focus on internal core activities, like developing new features. So far, positive results overall, with Oracle leveraging cost-effective solutions while maintaining high-quality standards at all times.
Apple: Apple, an American multinational technology company headquartered in Cupertino, California, is one of the biggest companies that use outsourcing services to run significant parts of its organization. One of their most famous outsourced projects was Apple Maps in 2012, which could have done better due to several issues surrounding the project. Thanks to social media rumors, it has been revealed that Apple outsources work through three firms. These companies include Wipro, TCS, Baidu Inc. and Google. All these corporations have been providing services for decades and continue to be just as prevalent with Apple as they were when they initially began working together.
Top U.S. Companies That Outsource Their Operations
Different companies in the United States outsource some or all of their operations. Some examples include Walmart, Apple, Microsoft, Oracle Corporation, Amazon, and IBM. These companies have been successful because they understand the value of outsourcing various aspects of their businesses to third-party vendors who can provide them with expertise in specific fields such as software development, customer service, and marketing campaigns. By leveraging external resources, these organizations save money while giving themselves access to a larger talent pool, allowing them to stay competitive in an ever-changing market landscape. But is there more than just access to untapped resources? Why do companies choose to outsource? Click the link to find out more.
Common Outsourcing Services
Regarding customer support services, most companies rely on call centers outside the country for cost savings. Still, they have quality assurance teams inside America managing those offshore branches, ensuring customers get top-notch experience when reaching out for help regarding any product or service-related issue. They leverage resources from countries like India, where experienced professionals are available at much lower rates than what you would pay locally here in the USA. This works excellently, especially if your company has a global presence. You can offer 24/7 customer support throughout multiple time zones and take advantage of cultural understanding by hiring locals from each region. Hence, they know best how to communicate effectively without creating misunderstandings due to language barriers, etcetera.
Finance Outsourcing Services
Financial difficulties are another field where Outsourcing has taken off tremendously. It has become so popular that Apple, IBM, and even Amazon have come up with different financial tools and services to help people manage their money in a better way. For example, suppose your company relies on a third-party vendor in some field, such as finance, accounting, or bookkeeping. In that case, you may outsource them to the third-party developer of those services in the country where the company is located. The same goes for other specialists such as I.T. support, customer service, legal department, and others which can be outsourced via phone or Internet for limited low costs compared to having them based in America. The primary purpose of Outsourcing is to leverage lower printing costs and higher profit margins.
Marketing is about getting work done quickly (within budget) yet maintaining high standards. Outsourcing your digital marketing campaigns to an agency or a company specializing in digital marketing will allow you to use their specialist knowledge and experience, which goes above and beyond customer support & call center services, allowing for a high level of repeatable results. By keeping the budgets low by outsourcing high-quality resources, your software developers, web designers, and other team members will be able to stay focused on developing the best product possible while still being able to provide customer services like support & sales at the same time.
Outsourcing I.T. support services has become very common in recent years with the rise of cloud-computing technologies allowing businesses to access remote teams anywhere in the world and work 24/7, ensuring customers get the best experience possible no matter where they are located or what time zone they live in. Outsourced I.T. teams are also a great option if you need assistance setting up your internal systems and databases since those experts already know how things are configured adequately. Hence, everything runs smoothly at all times without any technical issues arising while running business operations day and night throughout the year for an extended period. Companies like Microsoft and Oracle Corporation have been taking advantage of these services, keeping pace with the ever-evolving tech industry without having to hire permanent staff internally, which would cost much more money than paying third-party vendors who specialize in specific areas in the information technology required to complete certain tasks requested by clients using software development platforms like Java, C#, etcetera.
Human Resources (H.R.)
H.R. outsourcing services have become increasingly popular as companies look to cut costs while still offering quality service. Companies can outsource their employee benefits, payroll and recruitment to third-party vendors who specialize in these specific areas of business operations. This allows them to focus on core competencies while giving themselves access to a larger talent pool when needed. Just like any other I.T. support-related tasks, an H.R. could cost double the price if done internally due to labor laws forcing employers to provide extra perks, such as health insurance, pension plans, etcetera. However, by using overseas outsourced resources no need to worry about those issues since everyone is working on an offsite basis, so this won’t affect local employees’ compensation packages directly.
Is Outsourcing Staffing a Good Business Strategy for You?
Outsourcing is a widespread business practice among many large companies around the world. The flexibility of Outsourcing allows for a variety of solutions centered on your personal business needs. You can outsource customer support services and sales if you need assistance reaching out to customers. If you require legal guidance, contract management, or an independent auditor to help with your business operations, you can hire third-party specialists to help facilitate these crucial tasks. Lastly, suppose you intend to run some I.T. support tasks or build a website or mobile app without having to hire internally. In that case, Outsourcing is also doable by hiring the right people at a fraction of the cost of paying full-time employees. According to science direct (2):
“Our results show that outsourcing of technology and professional services from abroad has a positive direct impact on firm performance and that such positive impact is stronger in small firms. We also find that sales growth and slack resources positively moderate the outsourcing–performance relationship. “
– Science Direct
What Work Can You Outsource?
You can outsource almost any work, from customer support to human resources services to marketing and I.T. services. To decide if Outsourcing is the right move for your business, take into consideration the following factors:
- Do you have specific tasks that can be accomplished more efficiently by a remote workforce?
- Does your business have global aspirations? Can you pull off a global expansion strategy with only in-house workers? Is it time to hire an offshore team to tap into international markets?
By tackling these questions, prospective clients can achieve tremendous success. They will know what they need and when they need it, which helps them achieve better results while also reducing the risk of potential damages caused by failed projects. However, it is essential to make sure that the outsourcing company you choose has experience in the type of work you need to be done. A good hiring practice is to try a provider’s capabilities by requesting a demo before purchasing.
Where Can You Outsource?
Remote workers are flexible and can be hired from any country, so it is crucial to research potential providers based on the location of those workers. Outsourcing companies should also ensure that the local labor laws are followed in their specific country (https://sonatafy.com/what-is-the-number-1-outsourcing-location-in-the-world/). This instance can significantly affect how much you pay your staff and whether your business will receive required benefits like health insurance and pension plans as per local regulations. For example, outsourcing customer support to India is more cost-effective than hiring from the United States. Another good practice is to build a relationship with a provider before outsourcing work to that company. This practice is done by requesting samples of work done by the potential vendor.
How To Choose The Right Outsourcing Company For Your Business?
When looking for an outsourcing company, it is essential to list your criteria based on your business requirements. You can request an estimate anytime, but it is best to ask one after you have narrowed down your options to a few top providers so you can know what prices will be like. You should also specify what services you need so that the leading providers can give solid quotes and estimates based on their experience in providing those services. This will help you narrow down your selection and ensure that the company you choose can meet all your needs. Some Outsourcing solutions can be offered by specialized companies working in close partnership with global technology providers. For example, in 2013, Microsoft entered into a strategic alliance with Accenture to provide its cloud services to all Accenture clients globally over the next five years. Once you have narrowed down your selection, set up a test project with each one so that you can assess their performance and productivity. Finally, it is essential to periodically evaluate their performance and productivity to ensure they meet all of your expectations.
Criteria for Outsourcing based on your business requirements
Organizational Realignment: Whenever Outsourcing occurs, it requires a repositioning of the roles that were once held by internal staff. Once outsourced, it is crucial to plan and map your workforce’s future roles and responsibilities. It is crucial to mention that hiring offshore teams does not mean hiring fewer people; instead, you hire based on need. For example, hiring more customer support staff will be necessary if your business is experiencing a boom in sales. Otherwise, if your sales revenue has gone down, you may be forced to reduce your customer support workforce in favor of bringing highly skilled developers or graphic designers who can boost productivity.
Cost Savings: Outsourcing can be very cost-effective as compared to hiring employees. For example, if you want to hire a graphic designer, your best bet would be to outsource that service rather than hire a local person. If your company is looking to make refinancing payments on time, hiring more customer support staff will boost productivity and reduce revolving costs. When outsourcing, it’s essential to remember that the term ‘cost savings’ generally covers direct and indirect costs involved in contracting employees from offshore companies.
Workforce: Using a remote workforce to complete specific tasks involves reallocating resources from existing resources. Sometimes, it can be done by transferring employees from one department to another. At other times it consists in replacing specific roles and responsibilities. The main goal here is to ensure that the method of workforce realignment fulfills the goals of Outsourcing.
A well-thought-out organizational restructuring will help you determine where most of your work can be performed remotely, which reduces your reliance on in-house staff.
Local Workforce: Because Outsourcing does not inevitably involve replacing all internal staff with remote employees, it is essential to identify and prioritize tasks based on strategic importance and business value and decide whether to keep such tasks in-house. For instance, if you have plans to grow and expand internationally, it is important to hire local staff, who will serve as a bridge between your organization in the United States and overseas markets.
It is also essential to hire employees based on their skill sets rather than the location they are based at. For example, a business in Ukraine can provide you with qualified software engineers during an economic downturn because its workforce is less expensive than yours. Alternatively, hiring a resource from that country may be more expensive but still less expensive than hiring developers from the U.S.
Information Security: The security of sensitive data should be your top priority when outsourcing work. It is critical to have a strong knowledge of how the outsourcing company will protect your data, as well as how you can access that data. In many cases, offshore companies are mandated to follow different security standards than your company. Hence, it is crucial to evaluate the workflow and identify any potential security issues that can arise. You should also set up a communication protocol to verify that developers or customer support staff have been authorized to view or modify specific data in your system. It is also vital to ensure that all employees working remotely are well-versed with your policies and procedures before they begin accessing or transmitting sensitive information.
Companies That Outsource Supply Chain
Companies that outsource supply chains are essential in a business. They use the resources of an external organization for their products and make the difference between good and bad suppliers. A well-thought-out organizational restructuring will help you determine where most of your work can be performed remotely, which reduces your reliance on in-house staff. This process is mainly undertaken by companies that need to make their operations leaner and more efficient; however, its basic form can be quite complex since it involves multiple stakeholders. By reducing your fixed costs and increasing your flexibility without spending extra money on infrastructure, Outsourcing allows you to concentrate on what you do best while maximizing the value of your assets. An outsourced company might also provide a list of products or services. This list must include all your work areas or departments so that you can decide which departments require Outsourcing. Ensure that the company provides quality service to maximize your performance and business growth opportunities. Knowing how much more you will have to pay for each additional item delivered is also important.
Risks Of Outsourcing Services
Outsourcing is a tricky process that requires lots of research, understanding, and, ultimately, working with a vendor who can provide you with precisely what you need. Outsource the wrong company, which could cost your company thousands of dollars in lost revenue and downtime that’s unlikely to recover. It is recommended to hire a third-party I.T. account manager to serve as a liaison between the client, outsourcer, and management of the I.T. department. The third-party will also advocate on the client’s behalf, helping secure contracts, down-sizing expenses, closing operations without losing critical brand value, etcetera (3).
“The biggest risk with offshore outsourcing has nothing to do with outsourcing – it involves the expectations the internal organization has about how much the savings from offshore will be.”
– CSO Online
Organizations are constantly seeking ways to reduce their labor costs and increase efficiency. Outsourcing is one such method that can provide a significant business benefit while giving you the flexibility to focus on core competencies. It enables you to take advantage of economies of scale, provide reliable service, and streamline operations. Several factors are carefully considered before making your decision, including potential costs, quality of service, and staffing needs for the future. By answering these questions and carefully assessing your company’s current situation and plans, you can determine whether Outsourcing is a viable option for you, or you can make an informed decision about which outsourcing company is the best fit for your business.
- Even Google’s top-notch team of 89,000+ in-house employees doesn’t have all the answers all of the time. And that’s one of the reasons the company uses contractors — a LOT of contractors. As Bloomberg reports, 2018 marked the first year Google’s contract workers outnumbered their direct employees. – Medium Quote
- Our results show that outsourcing of technology and professional services from abroad has a positive direct impact on firm performance and that such positive impact is stronger in small firms. We also find that sales growth and slack resources positively moderate the outsourcing–performance relationship. – Science Direct Quote
- The biggest risk with offshore outsourcing has nothing to do with outsourcing – it involves the expectations the internal organization has about how much the savings from offshore will be. – CSO Online Quote