Outsourcing involves getting work done by third parties instead of in-house. A business outsources work when:
- It has to achieve production levels not possible with its existing facilities. This can be a long-term requirement or temporary peak-season requirement
- It does not have space to accommodate new workers and more workers are needed to attend to the workload
- You need certain kinds of expertise that is not available in-house
What benefits can you expect from outsourcing work instead of doing the work in-house?
Benefits of Outsourcing
Quick Start to New Work: When workload increases, or when new systems need to be implemented, it is quicker to outsource the work to competent third parties. That way, you can save time needed for routine tasks like:
- Recruiting, training and inducting new employees into your work environment
- Installation of new equipment, implementing new software and procedures and all the other incidentals of changing existing ways of doing things
Attending to all the incidental formalities like employee contracts, tax forms, work and vacation scheduling and so on
The time saved thus can be devoted to more important activities like business development or marketing campaigns.
Significant Cost Savings: To expand operations in house, you need to spend money on such things as:
- Hiring new office space, which can be quite expensive
- Buying new equipment and software
- Recruiting new employees and training them to carry out their defined roles
- Costs of employee perks, paid vacations, absenteeism and compliance formalities
- Losing the business and profits till everything is in place to attend to the additional workload
The money saved thus can be used for expanding your marketing network, conducting publicity campaigns,
Better Customer Service: You can provide better customer support and faster shipments by outsourcing the work to specialist customer support and shipment agencies. The improved performance on these fronts can soon bring results in the forms of higher turnover more repeat orders.
Higher Turnover at Lower Costs: You can carry the process further and outsource all marketing operations and focus on your specialty viz. manufacturing or provision services. With increased focus on your core skills, you can deliver better products or services, and that too with less overheads and overall costs.
Carry the process still further by outsourcing some of the production processes, such as manufacture of certain components. Soon you could be a hub organization that operates at low costs but completes huge volumes of business.
With the increased capacity to handle business, you can accept orders your competitors (or the earlier you) could have handled.
Outsourcing is a process that can dramatically transform your capacities for handling work and improving the effectiveness of your marketing efforts. And you can do these at far less costs than doing everything in-house (if needed finances were available for in-house expansion, that is).
Ultimately, you could be providing work to more employees in-house than if you had not expanded through outsourcng.