An Outsourcing Overview

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Companies have full plates these days. There are client projects with extended deadlines that need managing alongside a staff that includes employees and contractors. Expenses are piling up and revenue is slow to arrive. Each day brings about new challenges and obstacles to overcome to keep business moving forward.

Modern technology picks up some of the slack by allowing for staff members and contractors to work from home. Conference calls and personnel meetings take place online with everyone logging on one computer program to make these things happen. Operating in this manner cuts down on the functional costs companies endure as a standard part of business.

Another excellent way many companies work to reduce their operational costs is by outsourcing. Outsourcing is the practice of handing department functions and responsibilities over to an outside firm. Although it is a practical aspect of doing business, there are significant advantages to outsourcing as well.

Why Use Outsourcing 

Reducing costs and operational expenses is the main reason many businesses turn to outsourcing. By handing certain tasks over to an outsource company, a business can free up funding to spend on internal projects and in other departments that are in-house.

It can also protect a company from investing money into training new employees only to have them not work out seven days into their new employment phase. There are additional benefits to outsourcing not directly related to operating expenses.

Efficiency 

Business must continually engage in research, development, marketing and distribution practices to stay relevant within an industry. These costs then pass to the client on their final invoice. Outsourcing some of these department tasks places the cost burden on the outsource service. Companies now establish a competitive advantage by streamlining their approach to client projects.

Project Management 

Client projects are the lifeblood of many businesses. Arranging staff meetings and hiring new employees to work on a project is a time-consuming process. Electing to utilize an outsource service creates the opportunity for client project work to start the same day the company receives it. They have the resources to hire and train employees and start a project all on the same day. They will also bear the expense of any project funding as well.

Refocus Business Core 

Managers go in several different directions at once. It creates a scenario where something is bound to fall through the cracks. That can have a tremendous impact on the level of service that customers receive. An outsourcing company can take some of the most time-consuming tasks off of a manager’s plate, freeing up time that can put towards staff development and company growth.

Even Playing Field 

Smaller companies often face struggles when trying to compete with their bigger competition. These companies have resources, staff and technological advantages over a small business just because their capital funding account has a larger balance.

An outsourced service makes a small company appear much more substantial. Their staff members handle significant portions of projects and operations while allowing the small company to focus on client service management. Meanwhile, the outside will be none the wiser about how the small company is pulling off the big projects.

Remove Risk 

A risk is a natural part of doing business and one that is never far from the mind of a company. The risk factors include government regulations, financial restraints and technology liability. An outsource service already has a plan in place for handling the risk that comes with the service they provide. They willingly accept the risk and consequences that come with that risk. It removes a portion of the liability that companies work under as well.

 

Departments to Outsource 

There is not a bad department within any company that should not go to an outsourcing company. There are, however, ideal departments that work hand in hand with outsourcing without creating the feel of having a missing piece in the office each day. Here are a few departments a company should consider outsourcing.

Marketing and Sales 

Companies should consider outsourcing their marketing and sales departments because it expands their access to quality staff members who consciously stay up-to-date on industry trends and practices. They have the ability to optimize sales lead generations and potential client engagement practices.

Outsourcing these departments reduce the risk of high employee turnover. Individuals that work for outsourcing firms in marketing or sales position have extensive resumes which makes them attractive to the competition.

When a talented individual in an in-house marketing or sales department leaves, it could cripple the company operations for the time being. Instead, the outsource service faces this task without company functions taking a direct hit. There are additional benefits to having an outsource service for marketing and sales functions.

  • Development of an effective marketing and sales software program that company employees can receive training to use in-house.
  • Creation of return on investment software programs without the extra costs.
  • Successful execution of top dollar marketing campaigns that will capture the attention of target market audiences and produce high engagements rates.

Information Technology 

Technology is constantly changing as the industry unveils new products, software, and techniques that companies need to conduct business. As a result, information technology can be a costly department for many companies to operate. Placing the operations of this department in an outsource service provides a substantial return on investment for a company.

Technological equipment such as computers, wireless printers, satellite feeds and Internet service modems are vital to business operations. Having one or more of these items malfunction during the day brings work to a halt. Suddenly employees are unable to access client files on the company internal wireless network and managers lose ability to print important presentation materials.

When the information technology department services come from an outsource service, something major like losing an internet connection is a minor problem that the outsource company handles in minutes without disrupting company business. There are additional benefits of having an information technology outsource service as well.

  • Constant access to the latest technological advances in software and equipment
  • Reduction in the level of employee burnout from high demand job requirements
  • An increase in technical staff that are available for projects and problem-solving issues.
  • Lower costs of equipment purchases, maintenance and repairs.

Human Resources 

For many companies, the human resources department serves as the central hub of the office. It is where new employees get their first look at the company while current employees receive evaluations and pay raises. It is also a source of headaches for businesses due to the constant changes in employee benefits, health administration requirements and labor board specifications.

From an employment perspective, companies should not take the easy way out when hiring someone to head this department. A person must present the right qualifications and personality characteristics to run one of the biggest departments of a company. There is an extensive background check requirement because this individual will likely come in contact with the company finances when taking care of tasks such as payroll and employee raises.

Outsourcing human resource department responsibilities present some advantages for a company. The benefits start with a reduction in risk management potential. Legal aspects of having employees constantly changes as new employment and labor laws take effect at various times throughout the year. It can be a nightmare for a department head to stay on top of this information. An outsource service on the other hand, hires individuals who have a particular job requirement of enforcing current employment and labor laws. They remain on the lookout for any changes taking effect as well.

Another time consuming practice companies must endure is employee hiring and training. An outsource service handles these tasks with ease. Individuals receive offers of employment when their qualifications meet the guidelines a company provides to the outsource service. Likewise, the service has employees with a job responsibility of ensuring that current employees of a company stay in compliance with policies and procedures at all times.

 

Conclusion 

It is important that companies view outsourcing services as an extension of their business. Utilizing an outsource service does not mean that a company decides to replace individual departments within the fours walls of its office. Rather it works as if the company is bringing a new team member on board to help with project management, marketing and sales and employee management.

Outsourcing services are available to help streamline business operations, make things run smoothly and allow companies to focus on vital aspects such as client services and product line development. Yes, there are cost effective reasons to use an outsource service yet the benefits do not stop there.

These services are at the top of their game for the industry that they represent. Their staff members receive training on putting the latest industry trends into the services they provide companies. It allows companies to have specialized teams of employees without the added expenses these specializations incur. As more companies become aware of the advantages that the outsourcing service offers, they will jump on board, requiring outsource services to remain a vital part of the world of business.