Learn the benefits of outsourcing and determine if it is something that your company could start and benefit from.
You might start to wonder why you keep on hearing the word “outsourcing” and begin to relate this by offshoring some of your business needs and processes towards developing 3rd world countries like India, Philippines and Brazil.
Finding an appropriate way to do business is important for a successful work operation and is an alternative way to provide a solution in meeting deadlines. Outsourcing doesn’t only involve reducing costs for your business but is also essential in helping you maintain your businesses core operations.
Outsourcing has been practiced by a lot of companies but the emergence of the internet has allowed it to blossom into something bigger. Before we discuss the benefits of outsourcing, first let us determine what outsourcing is really about.
What is Outsourcing?
Outsourcing became popular in the early 1990s and is a word that refers to the practice of using outside firms or individuals to accomplish work that is normally performed inside the company. Small businesses often outsource their payroll processing, accounting and other important functions because they don’t have any other choice. Large businesses turn to outsourcing to cut of costs.
Nowadays, outsourcing encompasses services like digital marketing outsourcing, multi-sourcing, recruitment process outsourcing, strategic outsourcing, business process outsourcing and a lot more. However, outsourcing should not mean offshoring your work but would involve insourcing towards an external firm.
A lot of companies do not understand the benefits of outsourcing. Indeed, outsourcing allows companies to save a lot of money but it shouldn’t be the only reason to do it. Companies should be warned that outsourcing too much of their needs could turn out as a big mistake compared to never outsourcing any work at all.
Now that you already have a clear understanding of what outsourcing is, let’s move on to the benefits of outsourcing some business functions and determine if this is something that could work out for your company.
1. REDUCE AND CONTROL OPERATING COSTS
It is the most obvious reason why a lot of companies turn to outsourcing. Significantly, it is due to the amount of money that could be saved through outsourcing. The most crucial factor in improving the balance sheet of a company is its cost efficiency. A lower cost along partnered with a quality product is what a company often looks for.
A recent survey conducted by London School of Economics show that 70% of firms route for outsourcing to reduce their overhead costs. Although reducing costs shouldn’t be the only reason why a company should outsource their processes but it is certainly plays a huge role.
Outsourcing allows the conversion of fixed costs into a variable cost which would result to the release of capital for investment throughout the business and would allow you to avoid large overhead costs during the starting stages of your business.
2. ACCESS TO WORLD-CLASS CAPABILITIES
Once you start to outsource work, training and recruitment expenses should never be a problem. Looking at a company’s previous work quality through their previous projects could help you relax knowing that half of your work is already laid out for you.
A lot of companies have discovered that outsourcing gives them access to greater talents as well as professionals who are highly experienced throughout the world. Whenever you’d need specialized help, you can just broaden your search.
3. STREAMLINE EFFICIENCY FOR TIME-CONSUMING FUNCTIONS
When you choose a company who is highly experienced in handling outsourced projects, the Turnaround Time (TAT) for a project is reduced. Hence, the work that you need easily gets completed even before the time you need it.
A good outsourcing firm would have the appropriate resources to help start a project as soon as possible. Handling the same project within the company might involve weeks if not months in hiring the proper person for the job as well as training and providing them with the support they need.
4. FASTER AND BETTER SERVICES
Outsourcing companies are already capable of handling the task at hand and is better equipped to provide you with the best services that can be done faster than the actual time that you need it to be done. The faster your ideas get converted, the more efficient a brand becomes.
5. INCREASE EFFICIENCY AND FLEXIBILITY
If you want to expand and have flexible working hours then you should consider to outsource some of your work. Benefit from a high work output coming from experienced project managers who are capable of handling every project in a professional and experienced manner.
6. IMPROVE COMPANY FOCUS
Mostly, a company decides to outsource most of their jobs so they could continue to focus on their main operational activities. Outsourcing activities allow you to focus more on the things that need more of your time.
Change is an inevitable part of life and is something that companies should learn to embrace. For companies who spend most of their time doing unworthwhile things, outsourcing could definitely make your work processes easier and more convenient to handle.
Ultimately, companies should learn that outsourcing is definitely a two way street in a way where you get to learn practices of individuals that come from different countries and help them know about the work that your company does.
The benefits of outsourcing are greatly seen during the times of uncertainty. As companies find ways to outshine competitors, they should start to leverage the benefits of outsourcing aside from addressing cost and revenue efficiency, it can also open the doors for a profitable and prosperous company.
In 2019, companies and businesses should consider the benefits brought on by outsourcing and consider outsourcing services as a primary strategy to get through economic problems.
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