Why do companies outsource?
In the world of business which is highly exceptional and fast-pacing, it largely requires strategic planning and good decision making especially in these trying times. Keep yourself informed and know your market solutions. While you focus to make your business ahead from your competitors, customer service should always be on your radar. Keep in mind that one of the most essential part of your growing business - are the customers.
Outsourcing has been a powerful tool for many companies for over 25 years which converts prospects into profit and growth. Which now has also become accessible for small and medium-sized companies.
You might think, what is outsourcing?
Well, outsourcing is a way to help your business in delegating some processes to third parties or external agencies, utilizing benefits ranging from minimal labor cost, good customer service experience to give your more time to focus on how to improve the quality of your products and services and to be ahead from your competitors.
Let’s take a look at the top 5 reasons why companies opted to outsource.
Cost Savings
According to Rohan Bhansali, cost savings is the main advantage the outsourcing model brings in.
Due to surprisingly high corporate taxes and mandated benefits that U.S. based companies are facing, labor costs are one of the essential reasons why businesses are choosing to outsource.
You can double your workforce using highly-educated staff from the other country with nearly a similar amount of budget you’ll spend on your U.S. based staff especially for tasks that are mundane in nature and can really be done through outsourcing. This outsourcing option does not only create a huge impact on your company economically but it creates an extension of your business offshore which only focus is customer satisfaction.
Focus On You Core Functions
Companies also choose to outsource other tasks so that they can focus on their core business functions while delegating mundane and time-consuming tasks to third parties or external agencies.
Your company has more important business matters to attend to and it needs your 101% focus on creating and improving your products and services. Unlike other administrative tasks such as appointment setting, answering emails and phone calls and others, which stress you out and would take so much of your time if you and your core team will focus on that. These are just repetitive tasks that can eat up your day. Outsourcing these tasks will give you more opportunity to have your most significant time to focus on your priorities and core business functions while allowing you to delegate small, day-to-day tasks to third-party agencies.
Solving Capacity Issues
According to Deloitte’s 2016 Global Outsourcing Survey, apart from cost reduction, there are also additional benefits of outsourcing. Among the survey, 47% agreed that outsourcing resolves capacity issues.
If you and your team are running at capacity regularly, then it could be your best solution to explore. Let’s say your eCommerce business is currently receiving more orders than you and your current team can fulfill. Outsourcing this task to an order fulfillment service means you can take more orders and increase your revenues simultaneously. Outsourcing can create more bandwidth for your business.
Free Up Internal Resources
The 8-hour shift could be easily consumed just by doing repetitive tasks especially on the businesses who just got started, such as answering emails, data encoding, bookkeeping, and others. When you outsource these, these could free-up your employees in which they can focus on doing more important things and other responsibilities without getting tied up with extra work that can be done more efficiently and inexpensively by other professionals.
Freeing up your internal resources from mundane tasks could be effective and one of the benefits that will be realized when companies outsource.
Customer Focus
Customers are always an integral part to every business. Hence, customer service is an essential part of your business overall. The company will not succeed without good customer service even if you already got the best product in your industry. Having great customer service attracts new buyers and keeps the loyal customers coming back. That is why many companies exert triple fold efforts to good customer service strategies.
In outsourcing, you can assure that there are professionals that will focus on taking care of your customers’ concerns. Excellent outsourcing solutions help protect your business from negative reviews. A well-coordinated service strategy can keep your existing customers satisfied, increase loyalty, and would likely to recommend your business to others.
Most companies that are already outsourcing filled some gaps in their businesses and had more time to focus on their core function. So, if your company is looking into this strategy to keep your business ahead than your competitors, consider outsourcing.