Outsourcing is when a business uses a third party to complete a function or task for them. Common outsourced services include live answering, recruitment, book-keeping, tech support, telemarketing, social media management and more. These tasks are often outsourced when businesses would rather focus on their core service/product rather than investing time to learn another function. Other reasons include access to trained specialists who are not available in-house.
This blog unpacks the key advantages associated with outsourcing business operations, namely, reduced labour costs, access to specialised experts and an improved company focus.
Reduced Labour Costs and Overhead Expenses
Hiring a new employee generally involves an expensive recruitment process and intensive training. The employees must be taught your processes and workflows and if the business doesn’t already have processes in place, new workflows may need to be created. In some cases, the business will need to fund training for the employees to ensure their skills are up to speed with the latest industry requirements and knowledge. However, when you outsource the function to a third party, the outsourcing company assumes these training costs themselves – saving you time and money.
Let’s take the example of an accountant. You can either pay an in-house accountant to manage your finances or you can outsource to another firm. You might be wondering whether it’s financially viable to pay someone else to manage your finances, taxes etc or whether it’s cheaper to pay someone to do this internally… But the simple answer is that it’s cheaper to outsource. Here’s why…
Hiring an in-house employee incurs an abundance of employee expenses including training and development courses, salaries, legal fees, worker’s compensation, leave entitlements, superannuation and more. These are all fixed costs that must be paid. In contrast, an outsourcing provider assumes these costs for you. There are no employee expenses or obligations to pay. You simply pay for what you use.
Gain Access to Specialised Experts
Outsourcing companies have specialist knowledge and expertise compared to in-house employees. The outsourcing company manages the licenses and accreditation required by their work. In addition, they’ll be on top of the latest industry changes and trends, while attending training courses to further develop their skills and techniques.
For example, a company may outsource their payroll to an external party who specialises in finance and accounting. By outsourcing payroll, the company gains access to experts on matters of accounting regulations and laws, superannuation, leave entitlements and more. Outsourcing to an accountant is generally cheaper than hiring one directly as the firm will benefit from economies of scale, providing similar services to many other organisations.
Allows Your Team To Focus On What They Do Best
Outsourcing can enhance efficiency and lower costs, creating an environment where companies have the freedom to focus on the core competencies that drive growth. This is because you’re more productive when you’re spending time on something you’re good at. If you’re a plumber, you’re good at fixing blocked pipes and stopping water leaks. If you’re a hairdresser, you an expert at cutting and styling hair. If you’re a doctor, you specialise in treating patients. It can be hard juggling the competing tasks that come with running a business…but outsourcing has become a value-add solution that has allows business’ to increase their flexibility, while focusing on what they do best.
By outsourcing business operations to a third-party provider, businesses can improve their overall company focus. Employees are more efficient when they are not consumed by tedious administration duties. This allows businesses to focus on their core objectives and tasks at hand. It empowers organisations to exceed their goals and become a strong competitor in their respective markets. In short, businesses can save time, avoid stress and spend more time working on what they do best.
What’s the main takeaway?
Outsourcing allows owners to reap the benefits of cost-savings (as the function is no longer done in-house), while simultaneously gaining access to trained experts. It is likely that all the industries will begin to leverage business-process outsourcing to help reduce costs and accelerate the growth of their business.
When TMC handles your outsourcing, we offer a range of options. You can use our services long term, short term or for ad hoc assignments. Where outsourcing includes allocation of dedicated team members or resources, you can be involved in the selection of staff that will be on your outsourced team.
At TMC, we offer both onshore and offshore solutions to manage your business process outsourcing. Processes that TMC can help you outsource include:
- Phone Answering
- Email Management
- Lead Generation
- Appointment Scheduling
- Customer Service
- Data Entry & Management
- Order Fulfilment & Payment Gateway
- Back Office Support
- Triage & Escalation
If you aren’t sure, get in contact with us to discuss your outsourcing options today.
