Outsourcing

The Economic Inevitability

Surviving today’s business environment has become more challenging than ever. The current economic climate is forcing organisations to explore tactics to remain competitive. Outsourcing is one of the major strategies employed by different organisation to face this problem. In today’s industry, ‘Outsourcing’ is a well discussed and over debated term. So, let’s take a look, what are the benefits of outsourcing?

Outsourcing

Outsourcing can be defined as the strategic use of outside resources to perform business functions traditionally managed by internal staff. Using an outsource company will help reduce costs and gain efficiencies by leveraging the talent, technology and expertise of third party vendors. Outsourcing can be broadly characterized into two types of services:

  • ITO - IT Outsourcing: IT Outsourcing, involves a third party who is contracted to manage a particular application, including all related servers, networks, and software upgrades.
  • BPO: Business Process Outsourcing: Business Process Outsourcing features a third party who manages the entire business process, such as accounting, procurement, or human resources.

The Outsourcing Advantage

Companies of all sizes can face escalating costs related to full-time employees, hiring, training, administration, benefits and equipment. By some estimates, employee expenses account for up to 70% of a company’s overall revenue. In addition to providing sizable financial advantages, outsourcing’s other advantages are:

  • Expertise: Harness the talent, technology and expertise of niche providers and leverage best practices.
  • Management: Focus on the core aspects of your business and leave the worries of non-core activities to someone else without having to commit additional managers or your time to manage a project. It helps you to provide better service and retain your customers.
  • Personnel Flexibility: Hire specialists without being obligated to keep them on when they are not needed. It is easier to terminate an outsourced relationship than to layoff full-time personnel, which facilitates scalability and reduced risk.
  • Capital Conservation: Concentrate financial resources on core business activities rather than investing capital in overhead like office space, computers, etc.
  • Time Savings: Don’t reinvent the wheel. Using off-the-shelf solutions can help you by increasing speed to market your product.


Cutting operating cost

Avoiding needed investment

Focusing on core business

Inability to staff appropriately

Upgrading to current service level
Outsourcing Advantage

The top reasons cited by companies for choosing outsourcing (Source: Outsourcing Center)

Common Outsourced Business Functions

  • Order fulfillment
  • Accounting/billing
  • Information Technology
  • Marketing/advertising
  • Web design/development/maintenance
  • Sales/business development
  • Human Resources/payroll/benefits
  • Customer relationship management

Please contact us to know more about our outsourcing service.