Before the current society and the boom of the internet outsourcing, larger companies primarily dominated the outsourcing model. These days outsourcing has become a most normal way for most businesses to run their business. There are several reasons why a company or entrepreneur can benefit from outsourcing. This also allows the small businesses to get a competitive edge over the bigger companies.
The companies that save the most money with outsourcing are typically startups. They are allowed to get the work they need to do accomplish at a fraction of the price. The most common things that are outsourced are back-end jobs such as data entry/ processing, customer support, payroll processing, etc. This service is now available through small companies around the globe.
There are a few things that you should know before deciding to outsource your work. First you need to have a set goal in mind of what it is you need to accomplish though your outsourcing? Where is the outsourcing going to get you and your business? There are also some things you must be cautious of when outsourcing. But at the end of the day it has become an everyday function for many companies. Below I have listed some ways outsourcing can save you money along with the challenges you will face because of it:
- Lower costs
This is one of the primary reason businesses decide to outsource. It allows the business to get the work done for a fraction of the price. It also allows a business to skip costs such as health insurance and vacation pay. Many people choose offshore outsourcing because they receive quality at a much lower price. It has been researched and on average, a company can save about 60% in operational costs with an outsourced individual.
- Skilled Expertise
When you are hiring for a business it can be a challenge to find good people with skilled expertise to do the work at a reasonable rate. Outsourcing allows companies to be free from the hassle of in house hiring while getting an expert in the field.
- Time zone difference
There can be some challenges to he time zone difference but in the long run it has a great benefit. Even when a business is closed the work is still getting done and productivity is always moving forward. Of course it goes without saying this increase a company’s revenue if you are managing it in the right way.
- Ability to Focus
The down side to growth is the need for more things need to be done. Outsourcing to someone and allowing them to handle your back-office operations and administrative work prevents a company from investing time and energy that is needed for more important functions. Entrepreneurs have benefited from outsourcing repetitive and redundant tasks, giving them more time and opportunity to grow their business, it will also have you focus because you’re paying for other people to do the work that you aren’t doing.
- Increased productivity and Efficiency
Outsourcing can also improve the efficiency of business operations. If your business is more efficient it can only increase in its function. This opens the door to bigger expansion and new ideas.
When projects are outsourced, companies can give away the liability and risk associated with the task. A good example is payroll management. Outsourcing it to a payroll service provider gives a company the freedom to focus on other core activities of the business. This also saves money on the amount of liability insurance you have to pay and the risk of being sued.
- Improving customer service
Good customer service is the foundation of any company. Outsourcing it to companies overseas allows a company to offer 24 hours availably. Although as natives we often complain about having a hard time understanding the person on the other end of the phone or issues end up resolved. If that company had not outsourced you would have had to wait until the next “business day” sometime that is time we don’t have.
- Better people management
The time and energy you would have put into managing your staff can now be put into managing your customers. It allows a company to give their customers hands on attention and invest in research that will help them make their customer experience better.
These are only a few ways outsourcing helps to save money. The benefits are endless and the proof is in the number of companies that are currently outsourcing.