What Drives People to Outsource Their Business Process?

Outsourcing business processes has become a fast-growing trend worldwide. Outsourcing paves the ways to more opportunities to  improve business processes and offers better returns on investment along with other significant benefits.

Outsourcing has been around for over a thousand years. Companies outsource primarily to cut costs. Rather than recruiting people with different skill sets, it is more ideal – financially – to outsource to a team per task or project.

In a research done by Ghodeswar B and Vaidyanthan J (2008), there are four key areas that drive people to outsource: (1) Organisational, (2) Improvement, (3) Financial and cost, and (4) Revenue. Under these drivers, they have classified the objectives of companies that hire offshore staff.

 

Organisational

  • Achieve greater focus on the core business
  • Heightened flexibility with the ever-changing business conditions
  • More access to products, services and more sophisticated technologies
  • More time spent on strategy-related issues (ie. market positioning and new product developments)
  • Identify core functions that are less important and focus investments to more relevant core teams
  • Assign operational issues to an outside expert
  • Redirect resources from non-core activities to focus on serving the customers

 

Improvement

  • Improve quality of work and operating performance
  • Obtain expertise, skills and innovative ideas
  • Obtain technologies which would otherwise not be available
  • Improve management and operational processes including risk management
  • Improve credibility and image by association with superior providers
  • Eliminate the fixed cost of internal staff by outsourcing where possible
  • Be more flexible and dynamic with the continuous opportunities

 

Financial/Cost

  • Reduce investment in assets
  • Provide more resources for other valuable purposes
  • Expand operations into a new geographical region
  • Reduce and/or control operating costs
  • Access to an outside provider’s lower cost structure
  • Achieve cost reduction with enhanced performance
  • Handle varying demand more efficiently because of the economies of scale

 

Revenue

  • Achieve aggressive growth objectives by gaining increased market share
  • Leverage the service provider’s best process, capacity and systems
  • Expand capacity to design, test and build new services and products
  • Up the limit in handling the increased volume of business
  • Manage demand efficiently through an outsider’s automation process and the latest technology
  • Focus on business growth

Do your needs to improve fall under some of these objectives? It’s about time to reconsider outsourcing particularly if you have just set up a business.

Take your time in finding out your business process that can be offshored. Is it having a competent accountant to track your bookkeeping tasks? Do you need to improve your online marketing strategies? There are too many outsourcing companies that offer these services. However, there’s only few who can provide quality outputs you need.

Here is our list of the commonly outsourced tasks that might be helpful to your business. You may also contact us at admin@beale.net.au for further assistance with your business needs.

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