To outsource or not to outsource…that is the question. Outsourcing is not for everyone, but even Shakespeare would agree that the money-saving benefit outsourcing provides is a huge mark in outsourcing’s “win column”.
The History of Outsourcing
Outsourcing has been around for nearly a thousand years, though it has been gaining the most popularity within the last decade. In general, outsourcing means giving a business process to a third party provider on a contractual basis. Though outsourcing has permeated every industry, its popularity first manifested in the IT and software engineering industry; however, other industries adopted the outsourcing model and caused tremendous growth in the outsourcing industry. Presently, companies outsource things such as: payroll, accounts receivables/payables, web development, and sales.
Benefits of Outsourcing
Outsourcing can help any business, but it specializes in helping smaller business for the reasons mentioned below among many other reasons.
Reducing labor costs: Outsourcing removes the cost of training employees and providing benefits. Also, there is no concern about expensive temporary employees that may not be a good fit for the firm.
Getting skilled expertise: A business process may not be a core competency of the company, so hiring an expert will get the job done superlatively and efficiently. Typically the outsourcing firm has the proper tools and training to get the job done more effectively and cheaper.
Starting projects immediately: An outsourcing company already has the resources to begin a project immediately. Hiring in-house could require several weeks of training and much startup capital.
Running your business longer hours: If the outsourcing firm is overseas, the time difference means that it is possible to run a business 24/7. The client was provide the assignment during his or her work day and receive the completed task by the time the beginning of the next work day.
Focusing on the core business: Outsourcing firms take away many of the time-consuming business processes, leaving companies able to focus on the customer-driven process that result in sales.
Obtaining a competitive edge: Outsourcing can give a company the ability to; through increased manpower at a reduced cost, act as a much larger company. This gives a company a competitive advantages over other small businesses in the industry.
Future of Outsourcing
Outsourcing firms will continue to be in demand as small businesses continue to see the benefits of business process outsourcing. As technology continues to evolve, and at such a rapid pace, companies will have the need to keep infrastructure costs down, thus making outsourcing a highly attractive option.