For almost a year, companies all over the world across numerous industries have seen a massive shift in how they work. Many companies have had to quickly find easy and cost effective techniques to survive in an uncertain economic climate.
What types of work can you outsource?
There are three types of activities you can outsource to external vendors. Depending on the core skills of the internal team, it may be beneficial to outsource some or all of these activities to save time, resources and money.
- Business Process Outsourcing (BPO): This includes the front and back office staff that carry out activities, such as customer care, inventory management, payroll, data entry and similar administrative work.
- Software Development: Building software can take time and manpower, especially if it needs to be done quickly. Outsourcing some or all of the build can free up limited resources to focus on other areas of the business.
- Infrastructure and Technology: For many companies, it makes more sense to leverage the existing infrastructure of an outsourcing partner versus trying to build it themselves, which would be costly and time consuming. Additionally, they may benefit from outsourcing solutions provided by technology vendors with more experience in certain fields.
What are the benefits of outsourcing?
1. Scalability
Whether it’s processes or infrastructure, the ability for a business to scale quickly and efficiently can make or break it. Easy access to experts, knowledge and resources without the long-term overheads provides the flexibility that a business needs during times of sudden increased activity. By outsourcing services to an external provider, a business can also avoid potential costs and other risks associated with employee layoffs in the future.
This can be especially seen in the healthcare industry, where the global hospital outsourcing market size is expected to reach USD 679.2 billion by 2027. This will enable hospitals to easily access qualified medical staff with soft skills in hospitality and it will also provide easy access to non-medical staff, such as administrative workers, facility management, catering, laundry, and home care. By outsourcing, hospitals can scale as needed during times of sudden increased activity and their medical staff can focus on their core skill areas.
2. Cost
The economies of scale are one of the main reasons businesses choose to outsource certain activities. The costs associated with recruitment, office space, equipment, licenses, employee benefits, training programs, tools, and other requirements are significantly reduced by outsourcing the work to an external vendor. This potential reduction in cost has come to light even more in recent times as companies are forced to let most or all of their workforce work from home. The next logical step for cost-saving strategies will be to determine how they can offshore work-from-home jobs.
Cost savings are also especially notable in cases where certain activities are unpredictable. For example, a business may have a requirement to enforce a trademark, which is important to their brand, but requires immediate additional legal support. A legal proceeding requires expertise and resources, which may not be cost-effective to hold in house. Outsourcing to an IP services provider can help to keep costs down while being able to take quick action when needed.
3. Time
A key benefit of outsourcing solutions is that the external team can help you to work around the clock to get things done, especially when it comes to business process outsourcing. For instance, if you need someone to support a local timezone, but your business doesn’t have an office location or staff there, you can work with a local partner to conduct your business activities during their local hours.
Additionally, if there are tasks that need round-the-clock attention, you can work with an outsourcing partner in another timezone to continue working on them outside your business hours, so you can pick them back up the next day. These local partners will generally be able to provide these services at a much lower rate than if you were to hire in-house staff.
Given the shift to work-from-home culture is becoming more apparently permanent, more businesses are considering the benefits of outsourcing solutions to external vendors. In 2021, cost optimization and restructuring will continue to influence where and how companies do business.
