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Top 7 Outsourcing Advantages

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  • Top 7 Outsourcing Advantages

    As you evaluate your choices and decisions in outsourcing different components of your operations, you will need to consider the advantages of outsourcing. When done for the right reasons, outsourcing will actually help your company grow and save money. There are other advantages of outsourcing that go beyond money. Here are the top seven advantages of outsourcing.

    1. Focus On Core Activities
    In rapid growth periods, the back-office operations of a company will expand also. This expansion may start to consume resources (human and financial) at the expense of the core activities that have made your company successful. Outsourcing those activities will allow refocusing on those business activities that are important without sacrificing quality or service in the back-office.
    Example: A company lands a large contract that will significantly increase the volume of purchasing in a very short period of time; Outsource purchasing.
    2. Cost And Efficiency Savings
    Back-office functions that are complicated in nature, but the size of your company is preventing you from performing it at a consistent and reasonable cost, is another advantage of outsourcing.
    Example: A small doctor's office that wants to accept a variety of insurance plans. One part-time person could not keep up with all the different providers and rules. Outsource to a firm specializing in medical billing.
    3. Reduced Overhead
    Overhead costs of performing a particular back-office function are extremely high. Consider outsourcing those functions which can be moved easily.
    Example: Growth has resulted in an increased need for office space. The current location is very expensive and there is no room to expand. Outsource some simple operations in order to reduce the need for office space. For example, outbound telemarketing or data entry.
    4. Operational Control
    Operations whose costs are running out of control must be considered for outsourcing. Departments that may have evolved over time into uncontrolled and poorly managed areas are prime motivators for outsourcing. In addition, an outsourcing company can bring better management skills to your company than what would otherwise be available.
    Example: An information technology department that has too many projects, not enough people and a budget that far exceeds their contribution to the organization. A contracted outsourcing agreement will force management to prioritize their requests and bring control back to that area.
    5. Staffing Flexibility
    Outsourcing will allow operations that have seasonal or cyclical demands to bring in additional resources when you need them and release them when you're done.
    Example: An accounting department that is short-handed during tax season and auditing periods. Outsourcing these functions can provide the additional resources for a fixed period of time at a consistent cost.
    6. Continuity & Risk Management
    Periods of high employee turnover will add uncertainty and inconsistency to the operations. Outsourcing will provided a level of continuity to the company while reducing the risk that a substandard level of operation would bring to the company.
    Example: The human resource manager is on an extended medical leave and the two administrative assistants leave for new jobs in a very short period of time. Outsourcing the human resource function would reduce the risk and allow the company to keep operating.
    7. Develop Internal Staff
    A large project needs to be undertaken that requires skills that your staff does not possess. On-site outsourcing of the project will bring people with the skills you need into your company. Your people can work alongside of them to acquire the new skill set.
    Example: A company needs to embark on a replacement/upgrade project on a variety of custom built equipment. Your engineers do not have the skills required to design new and upgraded equipment. Outsourcing this project and requiring the outsourced engineers to work on-site will allow your engineers to acquire a new skill set.
    Angelo Brian Cartagena

    TeamSpan Global Solutions
    Direct Line: 1.203.659.4778

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  • #2
    Re: Top 7 Outsourcing Advantages

    Outsourcing is one of the best options to consider if you are expanding your business. Saving on costs while expanding operations has to be one of the main reasons I considered doing so for my business too.

    I also came across this guy who explained the benefits of outsourcing as a successful online entrepreneur. You might want to check on that one as it also enumerates the obstacles of outsourcing. You also need to take note of all these as they may make your outsourcing venture a failure.


    • #3
      Re: Top 7 Outsourcing Advantages

      One of the main outsourcing benefits is surely saving certain amount of money compared to the local development. Here's another article dedicated to this topic:


      • #4
        Re: Top 7 Outsourcing Advantages

        Outsourcing saves in your pocket, but it also looses benefit from having people who believe in your product/service.

        Keep it close to the heart and you'll find people who are more vested in your product - it might cost more but you'll receive a better end result.
        I specialize in randomness and binge management.
        Latest: Reach for Android


        • #5
          Re: Top 7 Outsourcing Advantages

          I have to admit with the latest post here – I have found that most of the work I outsource just does not have the same amount of passion that my work does. This is not to suggest that I am somehow unique, but I think it is different if your name is going to be on a project.
          My review –


          • #6
            I could not agree more. Outsourcing is a sure fire way of ensuring your business saves money while at the same time enhancing its profitability levels.