Outsourcing has become a common practice for small and medium businesses. With a lot of internal projects that can be done cost-effectively by an outside entity, entrepreneurs are saving more using this hiring strategy.
Companies are getting more confident of handing over both short term and long term tasks to outside suppliers. They have realised that they can get better services and results when they outsource work to an external party that specialises on a particular task. But how do experts really define outsourcing? How can businesses maximise their resources through this trend?
Experts define outsourcing as a business strategy aimed at retaining another business to perform some work activities rather than doing them in house. It is also commonly known as Business Process Outsourcing.
Outsourcing can be availed either domestically or overseas, with the latter being cheaply offered by developing countries. Most complex tasks that are hard to develop by small and medium businesses are often outsourced, especially in the fields of Information Technology and manufacturing.
An explanation about this method would be Apple ordering some of its computer and phone parts from other manufacturers to reduce manufacturing costs and outsourcing labour from China to assemble the parts together.
Businesses can also choose to outsource temporary office jobs like bookkeeping duties to accounting firms, as well as executive assistant tasks to outsourcing firms.
Benefits of Outsourcing to Grow Businesses
Here are some of the benefits that businesses can take advantage when they outsource their internal work. These benefits work together to expand or grow a business.
• Low Labour Costs- Companies typically save more when they outsource their tasks to other businesses, especially in developing countries where labour is cheaper. These companies still get quality work even though work is done by someone who is really not tied up with the business.
• Less Regulations- Because work is outsourced, companies will have less problems regarding regulatory restrictions like health and safety issues upon the performance of the job. These limits are handled by the outsourcing firms, so companies will have less worries while reducing operations cost.
• Focusing on Core Competencies- Mundane tasks that are handed over to an outsourcing company can help businesses focus more on important tasks and issues. This improves productivity and efficiency.
• Less Overhead Costs– Companies don’t have to invest in building more facilities, buying equipment, and hiring personnel to do the work. It’s even possible to run a big business while you maintain your office inside your home.
• Easily Adapt to Trends- Companies save themselves from buying the latest equipment through outsourcing. They don’t have to constantly make big purchases that can go obsolete in no time.
Companies can outsource work that fall under these following categories:
• Outbound Telemarketing
• Inbound Customer Service
• SEO and Online Marketing
• Web Design & Development
• Administrative Support
• Accounting and Human Resource
• Virtual Assistants
• Marketing & Sales Support
In any case, the bottom line is being able to grow and expand your business without spending too much money running it. This can only be done through effective and smart outsourcing of services.