Outsourcing is the phenomenon where you allocate certain tasks to not just an off-shore or on-shore location, but to a third-party company or freelancer. Generally speaking, it is exceptionally useful for small businesses with limited resources. For instance, outsourcing can provide various advantages including reduced costs, quality and timely fulfillment, more time for core functionality, better growth opportunities, limited HR liabilities, and more. Here are some of the parts of an average business which can be outsourced effectively for maximum profit.
Fulfillment of Orders Efficiently with Outsourcing Methods
When starting out in any business, it is easy to be flustered by the multiple tasks at hand. This is why outsourcing the fulfillment of orders can be a huge benefit for start-ups and small businesses. If you’re a small business, you should look towards building reputation and trust with good product quality, while leaving the order shipment or fulfillment factors to a third-party vendor. Benefits of doing so include various factors: for instance, better ability to focus on core functionality, better cost management, increased scalability, greater outreach, and additionally, a little less stress. The best part is that it lets you focus completely on your product without worrying over individual packaging, shipment or freight charges.
Outsourcing of IT Services to Other Firms
While IT is seen as a core building block of any organization, many small businesses can benefit from hiring other firms to take care of these needs. In 2016, we’re seeing better utilization of the cloud than ever before: which means that infrastructure no longer needs to be located in-house. How does this help you? By reducing a) the cost of infrastructure (think what you gain from minimizing computing needs), b) cost of employee (no IT department!), c) 24/7 support from trained technicians working with the outsourcing firm, and d) reduced utility bills including electricity, internet bills, etc. Honestly, the benefit of outsourcing IT services far outweighs the negatives if you’re a fledgling company or even middle-tiered. You always have the option of scaling up as and when required, depending on the need of the hour and resource availability.
When you decide to do HR from outside your firm
Outsourcing HR functions can have various implications for your firm, but most experts agree that it’s mainly advantageous for a small business. Having an on-shore, on-site HR team allows companies to mainly oversee payroll, tax filling procedures, employee and health benefits, etc. Generally, HR is also responsible for employee training and maintenance of records. However, when you outsource HR functions, you not only receive qualified people working for you, you reduce your own risks and liabilities, save costs in terms of back-office expenses, gain better productivity at the workplace, and reduce the workload of management when it comes to overseeing administrative functions.
Survey and Marketing Outsourcing Avenues for Maximum Profit
Marketing and surveys is best left to firms located outside a company, experts agree. In fact, outsourcing is incredibly useful for letting you “stick to your core competency, which is absolutely critical”. However, it’s not just division of labor but efficiency which is at the core of this. For instance, hiring the top advertiser or actuarial scientist in the field can be expensive for a small firm. Doing so via an outsourcing firm that specializes in these segments is considerably less expensive, while still providing equal amounts of talent and efficiency. It not only saves overhead though, it also reduced time taken to train staff, brainstorming requirements, expenses incurred from hiring staff full-time, and more. Think of it this way: you get the best services in the field, but at a fraction of its cost.
Outsourcing Customer Service and Development Teams is Smart
When you hire a customer service or development team from outside your firm, you essentially have to select a particular firm rather than key people who’ll be part of your team. Consequently, much of the nitty-gritty of HR and training is left to a company that already specializes in developing employees towards the same. In one particular instance, outsourcing customer care services saved clients about $ 1.6 billion dollars for an eight year contractual term. Similarly, outsourcing development teams can prove beneficial likewise, especially if you take a hybrid approach with both in-house and external teams. Not only do you stand to reduce costs and overhead, you stand to gain dynamic new approaches which can propel your products in the right direction.
Other than these factors, there are several other ways in which small businesses can gain better profits through outsourcing certain parts of the business. For instance, creating a website and content can be left to freelancers. Additionally, PR and Event Management can also be hired through external firms rather than maintaining in-house teams. This provides better flexibility, scalability, and improved services at just a fraction of the costs that would be incurred otherwise.
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