Here’s how your Business can Benefit from Outsourcing
- August 25, 2021
- Posted by: Funmilola Sanya
- Category: Business Advice
Outsourcing became a business strategy in the early ’80s when organisations realised that they could not compete globally. Outsourcing was the strategy that saved the day and enabled companies to increase profits, cut down on labour costs, and focus on the core aspects of their business. In the 1990s, outsourcing was fully recognised as a solid business strategy and became an essential tool in business economics – expanding bandwidth and increasing productivity.
Outsourcing can be defined as the strategic use of outside resources to perform activities traditionally handled by internal staff and resources. It is the business practice of contracting job functions or tasks to a third party, as an alternative to delegating those tasks to the existing staff or hiring new employees.
At the start, it was only the big, multinational companies that could hire contractors to take care of some particular types of work outside of their competencies, but now, smaller businesses can compete with the larger ones on a global space and thrive by harnessing the benefits of outsourcing.
No matter the size of your business, outsourcing can bring a variety of benefits to that business and make it grow. Here are the five major benefits of outsourcing:
Focus on core activities
This is the most important benefit of outsourcing your critical business process. The main point of outsourcing is to allow businesses to focus on core activities and competencies without unnecessary distractions. You will have more time and space to invest in the research and development needed to build your brand. With more time on your hands, your business can focus more energy on tasks that play to your skills.
Outsourcing offers businesses the means to get the job done at a better quality and a lower cost. It allows you to tailor your service consumption to your needs, and you get to pay for the services you consume only. For example, the cost of hiring and training new employees is expensive especially when you need them for short-term or temporary projects, outsourcing to skilled professionals outside your business can save some office space, save money in training them, and lower electricity and other utility costs.
Business operations expert and professor at Genesee Community College in Batavia, New York, James Bucki, says, “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.”
With a combination of a business’ internal team and a pool of skilled professionals equipped with specialist knowledge, expertise, and experience to deliver quality work at lower costs, your business will have access to new resources that will increase overall productivity and efficiency thereby contributing to the growth of your company.
It enables expansion
If you’ve ever wanted to expand your business operations and penetrate the global market, outsourcing is the best option to achieve that. Outsourcing will empower your business to explore new opportunities and areas for expansion. With saved costs and a global workforce (when you outsource to low-cost regions that transcend borders), your business can experience growth on an international level at a fast rate and expand to new locations.
An important employee might fall sick or even quit anytime, and then all the money and other resources spent on recruiting and training them go down the drain. This can drastically affect operations and cause problems for the business. Outsourcing helps creates a balance so that when such happens your business will still operate smoothly; tasks will be completed on time and positive results will be delivered.
When businesses undertake a project, they get to share the risks with all the people that were involved in that project and the business does not suffer the consequences alone if the project fails.
Outsourcing can bring many benefits to a business in different forms. Any business process that can be done from an offshore location can be outsourced. Processes like payroll management, transaction processing, recruitment, IT outsourcing, legal outsourcing, content development, web design and maintenance, logistics, manufacturing, customer support, bookkeeping, etc.
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