Seven Primary Benefits of Outsourcing

When it comes to business, outsourcing is one of the most growing and booming phenomenon. Outsourcing entered into the business dictionary since the world has become a global market. Outsourcing comes with a lot of benefits, the chief of which will be discussed in lines under:

1. Reduced Cost: One of the major benefits of outsourcing is the minimal cost of labor. The ultimate objective of a business is to increase profit, and one of the means of doing so would be by reducing cost. Usually business processes are outsourced to the under developed or developing countries which have low per capita income hence the cost of labor out there is cheap. So whether it is a manufacturing or services process that is to be outsourced, the cost of labor will be definitely low as compared to the more prosperous nations.

2. Focus on Core business: The business processes usually outsourced are not the one that are core processes of the business. Processes like Call centers, book keeping and online marketing are most common to be outsourced. Which though crucial but are not the core parts of a corporate or business. So once these processes are outsourced the business can focus all its energy towards more important matters of strategic importance such as strategic planning, corporate brand management and development of new products and services.

3. Time factor and Customer Satisfaction: When a process is handed to the firms that deal in outsourcing, they make sure that the delivery of the projects is timely and without any delay because the offshore firm can easily loose their business their core business for being sluggish. The delivery of product and services made timely onshore results in providing better product and services to the customer. Hence increasing the level of customer satisfaction.

4. Competitive Advantage: Outsourcing serves as a mean to increase both efficiency and effectiveness. The processes are outsourced to organizations that possess the professional expertise. And on contrary to the parent company these firms take the processes as their core business. The focus of a BPO is on increasing their effectiveness and efficiency which ultimately gives the competitive edge to the parent company in its domestic environment.

5. Professional Expertise: One of the reasons why organizations outsource is that they can’t bear the load of their work force either in monetary or workspace terms. Outsourcing helps in filling this gap by providing better human resource. The firms involved in handling outsource process possess the necessary skills and intellect in terms of workforce. So once there are low cost professionals involved, their can be no doubt about the quality of the work.

6. Minimal Risk Factor: Every business is subjected to risk factor. Government policies, market situation, technological changes, financial systems all change very quickly. Outsourcing providers manage this risk factor on their own without influencing the primary business onshore. This allows the Parent company to have one less thing to worry about and stay focused on the main business.

7. Small Business playing ‘big’: The reason why small business lags behind to major corporate is the non availability of all the above mentioned factors. A small business can also act “big” by outsourcing offshore and have the same grounds available which a big corporate possesses onshore.

In a nutshell, Outsourcing entails revolutionary benefits for a business. It serves the business in both qualitative and monetary terms. Qualitative in a way as by increasing efficiency and effectiveness and the later by reducing cost. Hence helping a business to prosper and reach new horizons.

 

Advantages of Outsourcing

Advantages of Outsourcing
Outsourcing is a process wherein business agreements with a third party service provider to provide services that might otherwise be performed by domestic employees of the business. Its purpose is to get good quality work at low cost. It has been in existence as long as work specialization has existed. Mostly, a company outsources those functions that are regarded non-core to the business or such functions which needed specialized skills unavailable in the open market.
There are many good reasons to consider outsourcing that is why demand of outsourcing is increasing day by day. Some of the most significant advantages are stated below.

Cost Savings: Probably the most familiar reason to consider outsourcing is to access cheaper labor. Workers in developing countries are paid far less than workers in developed countries due to the lower cost of living there.
Reduce Operating Costs: The operating costs of outsourced work are lower than if your company executed the operation itself. For example, an employee that is not working on site means you do not have to buy and retain a computer for him. It also means that you spend less money on electricity to power the computer. The savings can be stupendous depending upon your business operations.
Access to specialized skills: Third party service providers provide services of experts. Actually, to vanquish competition, third party service providers keep honing the skills of its employees. Also, it boosts particular skills in its area of activity. Business gets approach to such specialized skills by outsourcing to such a service provider, which may be of use in some other field of operation of the business.
Quality Services: The third party service providers transcend at the services they provide, businesses are guaranteed of better quality than a domestic employee would give. Moreover, any service provider always looks to give the best of services to get and maintain good reputation.
Capacity Management: Sometimes non-core function need more hands to meet deadlines. In such times, it becomes difficult for an in-house employee to handle the pressure. However, if the function is outsourced, the hindrance of meeting the deadline is of the service provider. Furthermore, the service providers have notably large talent pool at its disposal; it can easily assist such issues.
There are some disadvantages of outsourcing according to few reports but its benefits are much more than their disadvantage that is why outsourcing is highly recommended.
Linguistic constraints: Linguistic barriers are faced most of the time in outsourcing due to accent, phrases and if the first language of the nation is different from that nation which outsources the function.
Social Responsibility: Outsourcing reduces the employment avenues in the nation from where the function is outsourced, which is against the social ethics of the business outsourcing the process. But outsourcing results in a higher profitability for the businesses which are then tilled back into the economy. This definitely has far better impact than the negative impact of growth in unemployment. In fact the negative aspect is widely nullified by the positive impact of profit getting ploughed inside the economy.
Company knowledge: An in-house employee has a greater knowledge of the company and its business as compared to a third party but any service provider can compose the same kind of knowledge provided there is a structured knowledge transfer from the business to the service provider.