Running a business can get complicated. You have to streamline operations while sustaining the growth of your company. This is why most start-ups opt to cut down cost by outsourcing some of their business processes. Learn about how you can save money by sending off some of your business operations through outsourcing.
What is outsourcing?
Outsourcing of business processes is engaging the services of a third-party provider or contractor to complete internal operations. It entrusts the completion of a certain business process to another company. Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process or service to a third-party service provider.
A company can outsource its business services to a third-party provider in the country where it is located. However, outsourcing today is mostly associated with services being outsourced to providers located in foreign countries.
The Reasons for Outsourcing
The major reasons for business process outsourcing are:
- Reducing and controlling costs – You can lower expenditures for skilled labor, office and other physical infrastructure, and other fixed costs, and regulate variable costs that will result in significant savings.
- Focusing on the core business – You can concentrate on the core business process of your company while routine office tasks can be outsourced to providers.
- Maximizing internal resources – Internal resources can be freed up to be transferred to other important functions so you can have the control and flexibility to use them again for other contingencies that may arise.
- Streamlining time-consuming tasks – Your business can increase productivity and efficiency by delegating tedious and time-consuming office tasks to remote admin and office support teams.
- Tapping world-class expertise – Outsourcing countries have a pool of highly skilled and adequately experienced labor force.
Top Outsourcing Countries
The top countries for the outsourcing of business processes are India, the Philippines, China, Belarus, Ukraine, Bulgaria, Poland, Vietnam, Thailand, and Malaysia. Many of these countries share the same factors on why they’re top destinations such as a large pool of skilled and talented labor, affordable rate of professionals and technical personnel, low cost of power, office rental rates and building infrastructure, favorable tax incentives given to foreign investors, and the relatively low cost of doing business. Some countries like India, Philippines, and Belarus are also known for their proficiency in the English language.
Leading business services that are outsourced
The following are the top outsourced business processes and the benefits of outsourcing them:
- IT services – IT support and infrastructure are outsourced by companies because of the low labor costs of qualified IT personnel and infrastructure in the countries where they are located. Outsourcing countries such as India and the Philippines have an abundant labor pool of experts who have lower rates compared to their counterparts in the U.S. The facilities for the IT hardware and other infrastructure used by the remote IT personnel are also much affordable to operate and maintain because of the affordable power rates in outsourcing countries.
- Administrative – Cost-saving, flexibility, and removal of administrative challenges are the main benefits of outsourcing administrative tasks. Outsourcing enables you to save money that you would otherwise spend for hiring additional in-house administrative staff and the related office equipment and space that goes with it. You have the flexibility to adjust your manpower needs by hiring remote staff when there’s lots of administrative work that has to be finished in a certain period of time. Administrative challenges such as training and turnover of employees are eliminated because the outsourcing company will provide you with a trained admin staff that you can employ on a per-project basis.
- Content creation and social media marketing – Outsourcing of content creation such as articles, blogs, social media posts, newsletters, and other types of content projects are possible because outsourcing countries such as India and the Philippines are highly proficient in the English language, both oral and written. This makes it possible for a remote team of full-time content writers to produce a large amount of quality content that can be published more frequently. Many outsourcing providers also offer social media marketing services such as content marketing and SEO expertise. Outsourcing of social media marketing will allow your business to save time and increase productivity because the provider is mainly responsible for determining the most effective marketing strategies that will increase the visibility of your product or service online. These efforts can possibly drive more traffic to your website and blog site so that awareness of your product or service online will increase.
- Graphics design – If the graphics design of your product or service is not consistent, it may give your brand a look that is amateur and mediocre. Outsourcing of graphics design will help you achieve a consistent corporate image and look for your brand. Outsourcing countries have an abundant pool of skilled and talented graphic designers, video editors, visual artists, and other experts in visual creative work. They have the expertise to produce a coherent look for your brand in different types of medium such as Facebook posts, web pages, printed brochures and flyers, and corporate giveaways.
- Customer service/support – Customer service and support is provided by a company to help solve a customer’s concerns and questions regarding a product or service. The benefits of outsourcing customer service include having a remote team with diversified skills that can do a wide range of tasks, and access to a skills workforce that you can hire at a fraction of the costs of a team in the U.S. Outsourcing of customer service results in a better quality of service because of the 24/7 support that is possible in a foreign country that has a different time zone from the U.S.
- Accounting, bookkeeping, finance, and payroll – Cost savings is the number one benefit for outsourcing accounting, bookkeeping, and financial services. A company can have access to skilled accountants, CPAs, bookkeepers, and other finance professionals at a much lower cost compared to the professionals in the U.S. The third-party provider and its finance experts will also readily sign non-disclosure and confidentiality agreements so that a client’s confidential and sensitive financial information are adequately protected. For startups and small businesses with limited in-house staff, outsourcing of payroll processing will save time for the company owners because they can focus on the core aspects of their business and they don’t have to worry about the payroll of their in-house employees. Their in-house admin staff will also be able to concentrate on doing other important administrative works.
- Human resources (HR) – Timekeeping and payroll processing, administration of employee benefits and compensation, administration of employee policies and procedures, and compliance management are some of the most commonly outsourced HR functions. The outsourcing of these HR functions leads to cost-effectiveness and savings for a business, especially for small to medium-sized companies because they can considerably save on overhead costs for paying an in-house HR staff and getting extra office space for the staff.
Conclusion
Outsourcing of business processes can be very beneficial for startups and small to medium-scale companies, especially the benefits they bring to their human, financial and infrastructure resources. It’s very important for these companies to determine if the specific business process that they want to outsource will help them achieve the goals and objectives of their companies and if it will help them to grow and expand their businesses.
Listen to this interesting episode from the Startup Hustle podcast where Matt DeCoursey shared his experience on what it’s like offshoring Full Scale in Cebu City, Philippines.
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Through our Guided Development program, we take care of the tasks to recruit, assess and employ the top developers that can work on your projects while you will directly control and coordinate with a dedicated team of developers that we will hire for you. We can help you manage your remote development team. Contact us now to know more about our services!
