By 2027, the Business Processing Outsourcing market is estimated to reach $405.6 billion. In the U.S. 68 percent of consumer product companies currently outsource a part of their workforce, according to PricewaterhouseCoopers Retail & Consumer Industry Practice Report. In certain business processing areas like I.T and Customer Service, the shift to outsourcing is more pronounced- over half of the companies use third-party companies for customer interaction.
While the most common misconception is that outsourcing is only beneficial during business growth, deciding to outsource business tasks instead of keeping them in-house can be beneficial in a multitude of ways. As a business owner or entrepreneur, optimizing efficiency in your business is a prime concern- whether you are growing or a new startup. Harnessing the benefits of outsourcing can help you achieve your financial, operational, and strategic goals with fewer roadblocks- if it is the right choice for you and done at the right time.
The Benefits Of Outsourcing
If the recent events around the globe have indicated anything for businesses, it is the importance of focusing on their core operations and getting them right. It is not only good for their bottom line, it is essential for survival. Leveraging the benefits of outsourcing can help businesses, small and multinational, do this while reducing their overheads at the same time- a win-win situation on the business front. One of the overwhelming perks of introducing outsourcing into your business is that it allows a business to focus on the key tasks or what they do well. A great example is how law entities utilized sub-contracting during C-19 for freelance lawyer support, marketing, and HR functions for their legal practices. With the growth of remote working and technology like video conferencing, outsourcing is now more possible.
Whether this is manufacturing, product development, or sales, narrowing your focus to the main areas of your business means your can double down with your resources on those areas and leave the other business functions to specialists who know it well. Of course, this also means there may be opportunities to reduce your workforce costs and business overheads which is another plus for a business choosing to outsource. With less financial obligations, it frees up financial and human resource capital for business owners to focus on improving their business and its plans like growing into new markets or expanding a product range. So how do you know it is the right move to begin outsourcing? While there is no blanket solution, evaluating your business on a few key fronts can help you decide if it is the best move right now.
Is It A Core Business Function?
When choosing what to outsource often comes down to choosing between your core and non-core business functions. Critical business functions like bookkeeping, marketing, and IT maintenance may not be your strongest point as a business manager but are an important part of your business’ success.
Therefore, it is important to optimize these functions as well as your core functions like sales and production. For instance, 82 percent of businesses fail due to cash flow issues which highlight the need to keep track of your business’ cash flow and financial projections with high accuracy. Yet, many managers may not be qualified accountants or financial analysts and outsourcing can help them access the services of experts in the field- without the full-time price tag. If the burden of these functions is impacting your key business functions or eating into your time/financial resources, outsourcing may be a solution.
Is Your Customer Service Or Product Quality Being Affected?
Another sign that it may be time to consider outsourcing is if your customers are being affected. Customer service is important in any business because it aids in customer retention, loyalty, and business branding. Ultimately, this trickles down to impact employer branding and the financial success of your business. Around 96 percent of customers say customer service is essential in their brand loyalty and decides whether they refer the brand to others or returns to it themselves.
Also, 84 percent of companies that work to improve their customer service report an increase in their revenue, according to research from Dimension Data. Similarly, declining product or service quality drives new and recurring customers away, setting your business up for declining profit margins and sales. If you find that splitting time and resources between all business functions is leading to compromised customer service or product quality, outsourcing support duties to Triniter, Accenture, and other customer service outsourcing companies may be a better move.
Are Your Business Functions Streamlined?
Streamlining your business processes is necessary for efficiency and transparency. Simply put, it is the process of removing unnecessary or repetitive business processes, usually through the use of technology. Along with the increased cost-efficiency that streamlining can provide, it also enables better productivity rates and better business decision making. For businesses streamlining their business processes, outsourcing can prove to be a valuable tool in the activity.
However, there will also be a point where business owners will need to answer a key question: is it better to outsource or automate? For instance, companies can invest in bookkeeping software to speed up their accounting process and keep it in-house. Alternatively, they may choose to outsource repetitive functions like lead generation.
Are there ways your business can benefit from outsourcing? Yes, there is a high chance that there is. However, the extent of those benefits will depend on finding the right fit for your business and choosing the right outsourcing team.
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