6 MAJOR REASONS: WHY OUTSOURCING IS GOOD FOR YOUR BUSINESS?

You must often hear the word “outsourcing” which you might directly relate with off-shoring some of your business processes to developing countries or 3rd world countries like India, Brazil and Philippines. But, I must warn you with this addicting stuff, that ‘outsourcing’ is not only about cost reduction but it also helps you to maintain the efficiency in their core operation. So, before we actually begin with the benefits, we must know what exactly outsourcing is all about. I know this is much more into fundamentals which you as a reader might probably know, but bear with me for a couple more paragraphs for the sake of our non-informed readers, if any.

What is Outsourcing?

The word “Outsourcing” refers to a contract whereby two or more parties’ i.e. a company and an external vendor enter into an agreement for a specified period of time to outsource some of their operational work to external parties in exchange of services or professional fees. However in 21st Century, the word outsourcing encompasses services like, Digital Outsourcing, Economic outsourcing, Multi-sourcing, Recruitment Process Outsourcing, Strategic Outsourcing, Business Process Outsourcing, etc However, I will aptly suggest you that outsourcing doesn’t just mean off-shoring your work but it also includes in-sourcing to an external firm. There are certain management services that are outsourced such as, Tax, Payroll, Book Keeping, Accounting, HR Outsourcing, Customer Services, Knowledge Process Outsourcing (KPO), Data Process Outsourcing, etc. Now that you have a better understanding of the term, let us move on to its benefits:

1. Cost Optimization:

One of the most obvious reasons companies opt for outsourcing is due to the cost factor. As an organization, the cost efficiency is the most crucial factor in order to improve the balance sheet of a company. “Lower cost, Quality Product” is what the companies actually look for. According to a recent survey conducted by London School of Economics (LSE), Almost 70% of the firms route for outsourcing just to reduce the cost.

2. More Skilled Resources:

When you outsource your work, you don’t have to worry about the training & recruitment expenses. You just need to look out for the companies’ quality of their previous projects and half of your work is done. During outsourcing, you actually get access to more skilled labor at a very low cost. It is commonly seen that people opt for outsourcing as a major source to get access to the credibility & skills of a firm.

3. Saves Time:

Due to handling high outsourcing projects, the Turnaround Time (TAT) is much lesser on a project. The outsourced company has garnered the equilibrium between the cost & time. Hence, they have gained a thorough expertise in such a way that your work gets completed before the deadline without compromising on the quality. One of the major advantages is that outsourcing companies operate round-the-clock to get your work done.

4. Faster & Much better services:

Since they are quite aware about the advanced technology and latest changes of the IT industry, they are bound to provide you the best services at much faster rate than the actual desired time frame. The reason behind is that it helps the companies to achieve a goodwill in the market. Faster your ideas get converted, more it adds to your value proposition & brand identity.

5. Increased efficiency & Flexibility:

If you are looking out for desired expansion & flexibility in working hours then I will always suggest you to outsource your work. The reason behind is that you will be able to enjoy the high output of work, experienced project managers that cater personal attention to every project.

6. Chance to Focus on Important Activities:

In most cases, people opt for outsourcing to focus more on their main operational activities of their business. Outsourcing activities eliminate the extra time that helps you to focus more on your research part.

The above reasons are crystal clear that why outsourcing actually reduces your burden of operational work; whereas India stands out to be the major outsourcing provider in the world enabling the great diversity at a workplace.