India, Philippines, Costa Rica, Poland, Czech Republic, Lithuania – these are one of the World’s top destinations for business outsourcing (or simply “BPO”). So if hundreds and hundreds of businesses worldwide are moving certain parts of their operations elsewhere, there definitely should be some worth in it. In this first post I will try to provide you with the benefits a lot of companies around the globe are reaping with the help of outsourcing.
So the first question that may be swirling in your head right now might be – ‘what the ‘ell is Outsourcing?‘ Generally speaking outsourcing is business practice where certain business operations are transferred elsewhere rather than handled in-house. These operations can vary from bookkeeping, payroll, administrative tasks to more complicated ones such as IT support & marketing.
The trend to outsource significantly increased over the past 10 years and one of the major cause was economic recession in most of the economies worldwide. Most businesses where forced to tighten up their belts, improve efficiency while at the same time keeping their presence and increasing competitiveness in the market. Notwithstanding whether economy is in the recession or growing, outsourcing can always give many advantages and here are the major ones:
- Cost savings – it is proven that outsourcing can cut your cost significantly: it will reduce your overhead cost associated with doing certain activities in-house. You won’t need to bother yourself about hiring, training people, providing office space and supplies, paying insurance and other taxes associated with own employees. Moreover, most of the outsourcing destinations can offer you highly educated people that can do a good job for less.
- Increased efficiency – Cost savings is not the only advantage outsourcing can bring. Efficiency can be increased drastically as well. This is particularly relevant for the small businesses which usually do not have relevant knowledge, equipment and costly staff to do all of the operations in house. If chosen wisely, you may find top experts in the field as most of outsourcing companies specialise in very specific area such as bookkeeping, marketing or administrative assistance. They are brilliant in their field due to specialization and experience in the field.
- Shifts your attention to the core of your business – outsourcing can give you an opportunity to forget non-vital activities of the business and shift all of your focus to the revenue producing areas and the core of your business. Everything else can be taken care of by your outsourcing partner.
- Improves price-quality interaction and therefore your competitiveness – by outsourcing you can improve your product/service quality at the minimum costs. As it was mentioned above, outsourcing companies are specialising in very specific fields and therefore providing you with the expert-level services at the lower costs.
- Take advantage of time differences – if you choose offshore outsourcing company operating in different time-zone it can give you another advantage simply because they can work while you sleep, in that way allowing your business to be viable 24/7.
Clearly, business outsourcing can offer a number of benefits, but at the same time there are some risks that come along. Our upcoming blog post will cover the main downfalls of outsourcing and give you some ideas on how you can minimize those. Stay tuned!