Outsourcing is when a company entrusts some of its services to a specialized external company or an external service provider who is expert in its field. It is a form of subcontracting. A real business strategy, outsourcing is part of the daily life of many companies. While some discover the virtues of outsourcing in their lifetimes, other companies have resorted to it early in their creation. Outsourcing aims to improve business performance, which is why business leaders should always assess the positive results they can get from it depending on their case. Will outsourcing be of added value for the company? Will the budget allocated to outsourcing be amortized? So many questions that must be analyzed by the company before opting for outsourcing. Outsourcing has, however, already proven its worth and many companies are now won over by this strategic function. Let’s see what the main virtues of outsourcing are and what are the key points to take into account to protect you legally.
THE ALLEVIATION OF CONSTRAINTS RELATED TO LEGAL SUBORDINATION
The outsourcing contract is by nature foreign to any link of legal subordination between the parties and it is this link which generates specific obligations within the framework of an employment contract between an employer and an employee. Indeed, the company has a power of direction which it exercises over its employee so that this one responds to the directives of his employer. The power of management supposes that the company is constantly present in order to supervise the work of its subordinate. Outsourcing only generates the obligations provided for in the initial outsourcing contract Even if the IT Outsourcing Companies must follow the evolution of subcontracting; the parties are free to determine the conditions of performance of the services as well as the prices and the conditions of termination of the contract.
REDUCING COSTS RELATED TO SOCIAL CHARGES
The absence of an employment contract to carry out certain missions allows the company to significantly reduce its production costs. This seems logical since outsourcing allows financial visibility by investing a one-off budget for a specific service. The cost invested in the context of an outsourcing is controlled, unlike the costs relating to internal recruitment. Thus, the cost invested in recruitment in order to carry out a precise task is added to the remuneration of the employee as well as to the employer’s charges. Outsourcing is in this context more interesting for the company which gains in flexibility since the fixed costs within the framework of a hiring give way to controlled variable costs, which is all the more confirmed if it concerns hiring on a permanent contract (CDI).
BE FLEXIBLE TO BE RESPONSIVE AND COMPETITIVE
Outsourcing is a business strategy that helps meet a need that may be temporary or lasting. This need can be a complementary skill to those already present in the company or completely absent internally. In any case, outsourcing makes it possible to have recourse to a specific skill in a short period of time. The company can thus, thanks to this new skill, render a service that it would have been unable to perform itself. The responsiveness that outsourcing can offer makes it more competitive in a highly fluctuating job market.
CONCENTRATE A COMPANY’S RESOURCES THROUGH OUTSOURCING
The immediate counterpart of this outsourcing is the time saved by the company to focus on its own specialty. It is said that the company focuses on its core business, also known as “ core business ” Outsourcing is part of a strategy of refocusing on its strongest skills allowing it to rebalance the consistency of its portfolio of activities, which has the effect of optimizing its profitability.
OUTSOURCING AND CONTRACT: THE PRECAUTIONS TO TAKE
Various specific obligations arise from the outsourcing contract. Any outsourcing operation must therefore be the subject of a contract in order to clearly mention them. The obligations mentioned below do not constitute an exhaustive list and must be adapted according to the specificities of the contracts because the nature of the activity has an impact on the obligations of the parties. In the absence of a written contract, there will be no repercussions if a contract breach happened.
CONTRACTUAL OBLIGATIONS ON THE PROVIDER SIDE
THE PERFORMANCE OBLIGATION
This obligation assumes that the service provider is obliged to perform the work and assignments provided for in the contract. If the service provider does not perform the missions for which it is committed or if it performs them poorly, its liability may be engaged. “The debtor is condemned, if necessary, to the payment of damages either because of the non-performance of the obligation, or because of the delay in the performance, if he does not justify that the execution was prevented by force majeure.”
OBLIGATION OF CONFIDENTIALITY
The obligation of confidentiality obliges the service provider not to communicate on information specific to the company which is outsourcing “Anyone who uses or discloses confidential information obtained during negotiations without authorization is liable under the conditions of common law”.
THE PROVIDER’S OBLIGATION TO INFORM
The service provider has an advisory and information role within the framework of the outsourcing contract. The Civil Code recalls in fact that: “Any service provider is also bound by the information obligations defined in Article L. 111-2 of the Consumer Code with regard to any recipient of Logo design services. “As an expert in the field for which he is committed, it is normal for the service provider to have the obligation to inform his client and to guide him effectively in order to carry out a mission in the best conditions. The duty of information refers to the duty of warning, the duty of information and the duty of advice.
THE OBLIGATION OF VIGILANCE FOR PROFESSIONAL CLIENTS
From an amount of 5,000 euros excluding tax, the principal must ask the service provider for all supporting documents relating to its registration and the updating of its social contributions with Unsafe.
THE OBLIGATION TO COLLABORATE
The customer must act as a collaborator. In other words, it must allow the service provider to carry out the missions in good conditions by facilitating his interventions. The counterpart of the obligation to cooperate is the obligation to inform and advise the service provider.
THE SPECIAL REVERSIBILITY CLAUSE
The reversibility clause is a specific contractual provision that is mainly found in IT service outsourcing contracts (outsourcing * contract, ASP * contract, etc.). This clause is protective of the company which outsources because it aims to “reverse the outsourcing”, that is to say to take over the management of the outsourced function in order to manage it again itself or to have it managed. By a third party. Although there is no legal regime concerning this clause, it effectively secures the outsourcing of certain services. Increase its competitiveness; increase its responsiveness on the market; benefit from quality external expertise, the virtuous circle of outsourcing no longer needs to be demonstrated. Outsourcing is not, however, free of risks and the outsourcing company will always have an interest in rigorously supervising the outsourcing process so as not to commit legal errors that are severely punished by law such as the offense of bargaining.