All entrepreneurs have the same goal in mind: long-term success. To earn their place in their industries, they must work hard and make their company’s development a daily goal. But considering all the demands and challenges of running a business, this task is much easier said than done.
While it’s natural for business owners to want to stay on top of their operations, having too many responsibilities can do more harm than good. Wearing multiple hats may give them a stronger sense of control, but doing so can affect one’s work quality and mental wellbeing. Fortunately, partnering with an outsourcing consultant is one of the best ways to solve this dilemma.
You may be wondering, why do companies choose to outsource work? Do they know what they need and what to outsource? This guide will discuss everything you need to know about outsourcing! If your teams are having a hard time or if you’re experiencing any other outsourcing red flags, partnering with a reliable outsourcing provider can be one of your best decisions yet.
What is Outsourcing in Business?
Outsourcing is when you let another company handle a process for you. To explain things better, if you’re a product-based business that doesn’t specialize in customer service. Instead of allowing your untrained staff members to handle inquiries on your products, your outsourcing partner will be the ones to answer their questions for you.
One thing to know is that outsourcing and offshoring are two different things. You hire a third-party provider from another country to complete your tasks when you outsource. On the other hand, when you offshore, you hire a dedicated team member outside your country—rather than hiring them to accomplish certain tasks, you hire a complete role.
But now you may be asking yourself, why would I want to outsource?
Well, outsourcing helps companies reduce costs and increase their profits. For example, if a company can’t afford to hire an employee full-time or even part-time, they may choose instead to hire someone on a freelance basis who only works when needed and doesn’t receive healthcare or paid time off (PTO).
You can stop paying them altogether when you don’t need them anymore.
Outsourcing also allows you to focus on your core competencies—the tasks that make you unique as an organization—instead of trying to do everything yourself with limited resources.
Suppose an organization knows its best asset is its customer service teams but doesn’t have enough staff members dedicated solely to IT. In that case, they’ll want to look for an outsourced team for that department.
Why Do Companies Choose to Outsource Work?
1. Lower overhead costs
One of the main reasons companies outsource their operations is to lower overhead costs. When you bring outside help to do work you used to do in-house, you can save money by not paying for those employees and their equipment.
Overhead costs are typically the largest expense for any business. Lowering them can help you get a better return on your investment, making it easier for you to grow your company.
2. Acquire more flexibility with staffing
Companies outsource because it increases their staffing flexibility. Instead of building an in-house team, you can hire another organization to fill your vacancies. It allows you to operate more efficiently, with less overhead costs and more money to spend.
3. Focus on primary tasks
If your current workload distracts you from your primary tasks, this is a telltale sign that it’s time to outsource. Outsourcing is a good way to eliminate your most basic and boring work so you can focus on what matters.
4. Promote growth
When you’re running a company and looking to grow, outsourcing is one of the best ways to do that. Fewer expenses and more time on your hands means that you can focus on projects and other important matters contributing to your company’s development.
5. Improve efficiency
Outsourcing can help a company increase its efficiency. If you’re running a business and you don’t have enough people to handle all the work that needs to be done, having someone else do non-core tasks for you lets you focus on more crucial matters.
6. Speed up services
Companies outsource for a lot of reasons. When companies outsource, they can cater to their clients faster and better. There are obvious cost-saving perks, but another primary benefit would be the improved quality of work.
Outsourcing allows someone else’s expertise to fill in the gaps. If a company doesn’t have specialists in every field they want to offer, they can bring in experts from outside who do know how to handle those tasks.
7. Access experts and resources instantly
One of the reasons companies outsource is because they don’t have enough resources to do it themselves. It’s especially true for large organizations with many employees who need to scale up their operations.
Suppose a company needs more than 200 employees. In that case, they’ll most likely outsource their HR services or customer support department to an external company so that they can focus on other areas of the business.
Types of Outsourcing
1. Business process outsourcing
Business process outsourcing (BPO) is outsourcing your key business processes to a third-party company. These processes include IT services, customer support, accounting, sales, and HR. You don’t have to hire and manage employees in these departments but instead, pay the third-party company for their services.
2. Professional outsourcing
Professional outsourcing is one of the processes your business should outsource because it works on the principle that not all companies have the expertise needed to perform every function in their operations.
For example, if your business needs help with marketing, you can hire someone from an outside agency to handle that for you. Putting too much work on your employees can cause them to burn out and possibly resign. It’s one of the reasons why the term “The Great Resignation” was born.
3. Process-specific outsourcing
Process-specific outsourcing is a model of outsourcing that focuses on the process rather than the product. You can outsource any type of process, from manufacturing to IT services. However, it’s typically used for more niche tasks.
Process-specific outsourcing takes an internal process and breaks it down into discrete steps. Those steps are then outsourced to different vendors who provide the necessary resources for each step. The result is a more efficient and streamlined process that benefits both the client and their vendors.
4. Multi-sourcing
Multi-sourcing combines different services that you may want to outsource. This type of outsourcing is well-suited for larger corporations that want to outsource various tasks to other vendors. Combinations like IT and business functions are suited for multi-sourcing.
5. IT outsourcing
IT outsourcing is when a company hires another company to care for its technology needs. The company that outsources its IT will pay this third party to deal with tasks like installing new hardware, network maintenance, and possibly cybersecurity.
6. Manufacturing outsourcing
Manufacturing outsourcing allows companies to outsource the manufacturing of their products to a third-party company. The company will send its designs and specifications to the manufacturer, who then creates the product using their own materials and processes. This method can be less expensive than building your own manufacturing facility.
7. Project outsourcing
A company may outsource their projects if they don’t have the in-house resources to complete them on time or if they feel they can get a better product by outsourcing. Project outsourcing can be for the whole portion of the project or a part of it.
What to Outsource: 10 Processes You Should Let Your Partner Handle
1. Customer service
You should acquire customer service solutions because it’s easier and cheaper to manage. You don’t have to screen many people; you just pay for the service.
It’s also better for your customers since there are fewer chances for human error. You can even focus on other tasks like product development instead of dealing with customer complaints.
2. Telesales and telemarketing
Telemarketing and telesales are great for companies to get leads, but they require a lot of time, money, and resources. If you’re a company selling products requiring face-to-face interaction (such as clothing), having an in-house call center might not make sense.
Instead of spending all your time managing your sales team and making sure they’re following up with potential customers, you can let experts do it for you—and focus on what matters most: creating great products. Not to mention, outsourcing consultants only make use of proven telesales techniques!
3. Software development
Companies should outsource software development because it can help them save costs and build programs more efficiently. Creating software is highly complex and will normally require an expert to ensure it operates smoothly. Moreover, working with an outsourced consultant also means that you won’t have to worry about maintenance and updates.
4. Accounting
Managing a business’ finances is a complex task that requires specialized skills. You don’t want to waste valuable time and resources trying to learn how to do it when you could focus on growing your company.
5. IT management
IT management is often very expensive and complex, so it can be hard for small companies or startups to manage their own IT departments. It can result in higher costs and lost time due to slow response times and lack of experience.
By outsourcing this responsibility to an external provider, your company can focus on its strengths while still having access to the expertise needed for IT management.
6. Manufacturing
Outsourcing manufacturing can be a great option for companies looking to expand their product offerings but don’t have the space or funds to do so. It allows you to expand your operations without worrying about hiring new employees, building new facilities, or purchasing expensive equipment.
7. Shipping and logistics
Companies should outsource shipping and logistics because it’s a lot of work. You need to hire people, keep track of inventory, fill orders, make sure they ship out on time, and follow up with customers if there’s an issue with the product. Many companies will take care of all these things for you, so you can focus on growing your company.
8. Research
Outsourcing research is easy. You get the information you need to make your business successful without spending much money or time. Outsourced researchers have plenty of experience, so they can help you find the most accurate data to use in your business plan.
9. Human Resources
Companies should outsource human resources because it can be difficult to keep up with the growing number of laws and regulations that govern HR practices and the changes in those regulations. Your outsourcing provider can also manage tasks involving recruitment, payroll, and distribution of benefits.
10. Administration
Outsourcing administration to a virtual assistant means you don’t have to pay for office space, equipment, or other resources needed for your business.
Virtual assistants are experienced in managing various tasks such as researching, handling data entry, writing emails and letters, and scheduling appointments. If you’re spending too much time on admin work, it’s a sign you should outsource.
5 Factors to Consider When Choosing an Outsourcing Consultant
1. Security protocols
Security protocols are the foundation of client-consultant interactions. Without them, you’re risking your business—and that’s not an option.
It’s important to ensure that a prospective outsourcing service provider thoroughly understands your company’s security protocols before you choose them as your partner. Your security protocols are the first defense against hackers, so potential partners must secure your system’s ins and outs.
2. Experience in the field
Companies should consider experience because it’s a good indicator of how well the company will be able to handle the work that needs to be done. Outsourcing consultants can bring much value to your business since they know what works and how to do it. To help you choose the best outsourcing consultant, here are different tips for finding the right outsourcing company.
3. Complete resources
Consider resources before choosing an outsourcing consultant. It’s one of the ways to guarantee that the consultant has the right experience and expertise to deliver on their promises. You should work with a company with plenty of industry experience.
4. Flexibility
Flexibility is key. The ability to adjust to changing circumstances is vital, especially when dealing with international partners. Additionally, it allows you to work with a company willing to adapt its services to your needs, so you know you’re getting accurate results.
5. Transparency
Transparency plays a large role when working with an outsourced consultant. Both parties must be on the same page throughout the process because miscommunication can lead to errors. The goal of transparency is for you to be efficient and practical.
Power Your Company With Reliable Outsourcing Solutions
Outsourcing has several benefits that enable businesses to thrive and possibly do better. The numerous opportunities and the amount of time and effort it saves are something that you can capitalize on. Working with an outsourced team is a worthwhile investment and will eventually take your business to the next level.
StratAccess is one of the premier outsourcing consultants that can help you out. We offer numerous services to assist any business, so if you want to learn more about outsourcing in the Philippines, don’t hesitate to contact us!
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StratAccess Inc., established in 2012, commits itself to find its clients the right BPO for successful business solutions. The company focuses on transforming the landscape of business partnerships, especially in the need for digital transformation. StratAccess consultants stand ready to help clients take a hard look at their business objectives, organization infrastructure, and operational practices.
We at StratAccess strive to build long-term relationships that extend beyond the typical vendor-client transactions. Our primary focus is to successfully promote and serve each client’s products or services as though they are our own. Combined with the skill and knowledge of the outsourcing industry, our company has positioned itself as a leader in delivering its clients access to qualified quality and cost-effective BPO referrals.
