Modern approaches to doing business need constant involvement of professional contractors for cooperation. Some partners are transferred to the management of business processes in a complex. Others – responsibilities for solving specific problems. In any of the cases, attracting a contractor, the head of the company seeks to optimize its income and expenses. Also it’s about increasing efficiency to increase profits.
Outsourcing and ETM are services that are very popular both in foreign and domestic business environments. They ensure the rational allocation and use of the organization’s resources and contribute to many benefits. They have a lot in common. There are plenty of differences between them.
But how is the extended team model different from outsourcing?
Despite some similarities in service, there is a significant difference between the two. Outsourcing involves the complete delegation of certain business processes to a contractor. The latter assumes the responsibility of solving problems in a specific area to provide the customer with the desired result. If a company products activities and plans to develop it, then it can transfer the functions of logistics or marketing to reliable partners. Instead the focus goes on the manufacture of products.
The difference between extended development team and outsourcing is determined bya number of factors:
- Field of activity. Outsourcing refers to any business process delegated to a contractor. The company can transfer to the management of a partner both the responsibilities for the conduct of logistics or warehouse activities. Also there are tasks of marketing and production. ETM is related only to personnel management. It is used to optimize tax and other expenses of the company by officially cutting staff;
- Service delivery format. Outsourcing involves the implementation of turnkey projects. It can be a specific stage in the manufacture of products. Or it’s an entire line of business of an organization. The withdrawal of employees from the staff needs the professional management. The contractor does not care what tasks are performed by the personnel re-registered to the staff;
- Payment order. Both services are characterized by the signing of service contracts. The delegation of the business process to the contractor involves the transfer of payment to the latter after. But work is done beforehand. When the desired result is obtained, the client pays for it. As part of the withdrawal from the state, financial relations between the parties are closer. The salary of the employees removed from the staff depends on how much money the customer provides for its provision.
Key features and benefits of ETM
ETM is the process of transferring certain business tasks to the management of a reliable contractor:
- The service is used to free the company’s resources from performing secondary functions;
- Responsibilities for solving non-core tasks are delegated to the outsourcer;
- The head of the organization receives the necessary result by paying for services under the contract. He does not involve his own labor resources in the process, which allows to concentrate on the main area of activity.
Extended software development team Applandeo involves the delegation to the contractor of only those processes that apply to HR administration. Only in relation to the out-of-staff personnel. Employees leave the organization and are then recruited by a new employer. The latter is engaged in their documentation and social contributions. The customer continues to manage the personnel in the usual mode, but pays for the services to the contractor, who is in charge of the full staffing.
When to use the extended team model
ETM is the process of transferring HR management responsibilities to a professional contractor. The service is used to relieve the company of the need to document and financially maintain personnel. Instead, he is registered with a specialized agency, where he is listed in the state and receives a salary. The budget for the formation of the payroll is allocated by the customer. The contractor only distributes it, charging his remuneration. This tool allows you to officially reduce the staff of the organization and entrust the HR administration to a partner.
Summary
In fact, ETM is a narrower area of outsourcing. Both services are associated with attracting a contractor to solve specific business problems. They help to optimize the company’s income and costs. They increase the efficiency of its core activities and accelerate development. The difference between outsourcing and ETM allows you to determine the best services, based on its goals and needs.