Exploring the Reasons Behind the Practice of Outsourcing

More and more companies are considering outsourcing services for their non-core business functions recently.

To understand this emerging trend among companies, we’ve listed some of the reasons behind the practice of outsourcing.

Strategic Focus

CEOs know that they can’t focus on their businesses’ core competencies if they keep micromanaging all areas of their businesses. Hence, it is wise to focus on core competencies and outsource those that are considered non-core or secondary business functions.

When we say non-core work, we refer to work that is routine, easily replicated, and transactional. Core competencies are work functions that add value and transform the business.

For example, a business can focus on innovation and design, and outsource non-core work such as administrative tasks. A study showed that companies who outsource admin tasks by more than half have increased their strategic focus by forty percent.

Financial Savings

Cost savings and control are the main drivers why companies choose to outsource non-core business functions.

Outsourcing providers can deliver specialized services at a fraction of a cost since economies of scale are achieved when they provide this type of service to many other companies.

For example, companies gain ten to twenty percent in savings when they outsource their payroll operation—a specialized non-core function.

Specific and Specialized Expertise

Hiring in-house experts costs more than outsourcing services to providers with specialized expertise. Working with experts also reduces your company’s risks and liabilities, as these providers are more adept at their skills and have updated knowledge in global standards in their field.

For example, outsourcing AP functions to a qualified provider not only makes your accounting and payroll operations more efficient and error-free, it also keeps you updated on the latest laws regarding taxes and business exemptions when it comes to year-end audits.

Outsourcing companies usually employ the best industry practices with the latest in technology to stay globally competitive in their respective fields. Companies gain all of these when they outsource.

Gaining a Different Viewpoint

When a company decides to outsource, it gives itself opportunities to explore alternative and even better perspectives. When they hire an outsourcing provider, they gain fresh insights into service operations, standards, and even new methods of delivering services.

A company doesn’t only gain a provider when they outsource, rather they gain a partner as well.

Timely Service Delivery

Outsourcing providers are experts in their fields. They have an efficient workflow system, allowing companies to save on time since they don’t need to study and develop an in-house system and train employees for it.

Outsourcing providers also have service level agreements (SLAs) that ensure service delivery is guaranteed to be delivered on time and goal.

Access to Advanced Technology

The majority of the driving force of outsourcing today is the need to gain access to technology. Companies want to improve efficiency in operations by employing technology, but don’t have the necessary manpower and money to invest in infrastructure, equipment, and talent.

Since technology is involved with almost every aspect of operations, as it reduces transaction time, outsourcing technology needs help in improving service without having to develop new technologies to meet business needs.

Outsource Your Services with Infinit-O

We’ve seen the growth of outsourcing over the years, as more companies across various industries have seen the value that outsourcing operational functions bring to their businesses.

At Infinit-O, we are committed to excellence in providing high-quality outsourcing services for our clients, recruiting and training only the best and qualified people for our clients’ specific needs.

Our full suite of outsourcing services gives clients access to a superb knowledge base and the industry’s leading practices, allowing you to have a strategic focus on your core competencies instead of performing secondary non-core but complex tasks.

Resource: http://www.blog.infinit-o.com/exploring-reasons-practice-outsourcing/

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