How Outsourcing Can Save You Money

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.
  • Risk
    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.

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17 thoughts on “How Outsourcing Can Save You Money”

  1. Bob Lynch says:

    Interesting information you provided John chow.I have enjoyed your post for quite some time now.I know a thing or two about money among others.Interesting thing is the internet is somewhat new to us in a sense.Considering its peak popularity has been not even for two decades.
    Take care,

  2. I personally outsource numerous things I just don’t have time for via fiverr.com which is becoming more popular for graphics,videos & writing!

    1. John Rampton says:

      I really like fiverr, pretty decent site to outsource too!

  3. womg says:

    I regulary use fiverr, because it save me a lot of money. Nice post, thanks

  4. faisal says:

    While the advantages are certainly there, there are loads of disadvantages too.

    1. John Rampton says:

      Agreed, going to put a post up in the next week about that!

  5. Abhik says:

    Yes, outsourcing can save money and time, but you need to find the best one to do the job and that’s what takes hell lot of time.

  6. Keith says:

    One of the hardest things an entrepreneur can do is let go of the reins. Once they break that bad habit thought their business can flourish. They can get a lot more done and concentrate on what makes customers happy and makes money. Great article John!

  7. Lee Ka Hoong says:

    I agree with you John that outsourcing some tasks could really save us money especially our time and effort which equal to money too. I used to outsource my article writing and SEO tasks to freelancers, usually I catch them at WarriorForum, there are actually many talent freelancers which can complete your job at low price due to the high competition.

    Anyway, sometimes outsourcing is much more better than doing it by yourself. Nowadays, there are many freelancers which provide poor quality, so you have to pick them wisely or you’re wasting your money and time.

    1. John Rampton says:

      Agreed, many outsouced people out there that are willing to work hard for you! Some of them even do a better job then you could ever do!

      1. Lee Ka Hoong says:

        I agree with you John, sometimes we’re not really familiar with some niche which we find it’s profitable, we step into the niche but got no idea how to maintain it. In this case, outsourcing the writing task would be the only way. At the same time, we have to keep an eye on the ROI to see whether it’s worth to continue the project.

  8. Aasma says:

    Outsourcing has very best option, you can get quality work at lower price. But you must know how to differentiate between quality and poor service providers.

  9. Hi John,

    My name is Emir and I work for Freelancer.com. I actively surf the web to search for online sites, blogs and forums that discuss online outsourcing and I came across your post here.

    It’s great that we have users like you that strongly believe in online outsourcing. Reading your post is what fuels us to continue to keep on providing great opportunities to freelancers and employers everywhere in the world.

    Outsourcing jobs is the future and many industry analysts and thought leaders believe it so. According to globalchange.com, while most outsourcing is by large companies, small companies provide the most jobs and most of the economic growth in the U.S. and Europe.

    Here are a few more quotes:

    By 2015, US companies will move 3.3 million service jobs to offshore locations, accounting for some $136 billion in wages. Of this total, 473,000 jobs – or 8% of jobs in the information and communication technology sectors – will go offshore.”

    “Offshoring will grow at the rate of 30-40% a year over the next five years”
    (Forrester Research)

    “160 million jobs, or about 11 percent of the projected 1.46 billion service jobs worldwide, could in theory be carried out remotely, barring any constraints on supply”
    (McKinsey)

    “Outsourcing is no longer just for Fortune 500 companies. Small and mid-sized firms, as well as busy professionals, can outsource their work to increase their productivity and free time for more important commitments. It’s time for the world to take advantage of this revolution.”
    (The Four Hour Work Week)

    This is why Freelancer.com is in this business and why we have millions of users of the site and hundreds of thousands of satisfied customers.

    Thank you very much and we hope to see you use Freelancer.com services.

  10. I must admit that when I first started outsourcing my work duties I wasn’t confident if it will be worth the savings on costs. I hear all this on how great outsourcing is but if I myself didn’t see results, you can’t make me a believer. So after forcing myself to try it out I was feeling pretty good about myself because not only did I save up on costs but the output was better than expected.

  11. I am also looking into the possibility of some of the work on my site because I’m getting fed up by to many tasks and I can’t really concentrate to make it grow. Any tips?

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