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So outsourcing is a process to get your work done from a third-party vendor instead of keeping it in your company. So when it comes to outsourcing there are various advantages associated with it.
This is the most obvious benefit relates to the cost savings that outsourcing brings about. You can get your job done at a lower cost and at better quality as well. Due to the difference in wages between developed countries and countries like India, companies get a marginal cost advantage through outsourcing. These companies get up to 60% of cost-saving by outsourcing their work to India.
B) Increased Efficiency
When you outsource your business needs to an outsourcing partner they bring years of experience in business practices and expertise in delivering complex outsourcing projects. They can do the job better with their knowledge and understanding of the domain. This leads to an increase in productivity and efficiency in the process thereby contributing to the bottom-line of your company.
C) Access to global talent
You no longer need to invest in recruiting and training expensive resources for your business. Your outsourcing partner takes care of the resourcing needs with their pool of highly skilled resources. This gives you access to global talent. The resources employed by these outsourcing partners are well educated in the respective business areas and are experienced in handling the business needs of companies that want to outsource.
D) Better operational control
Outsourcing gives the edge to business processes and operations. Many businesses have a major problem in managing business operations. As the companies grow this problem becomes more and more uncontrollable. An outsourcing company can often bring better management skills to your company. Outsourcing partners have expertise in particular business operations.
Example: An information technology department might have too many projects, not enough people, and higher budgets. Whereas a contracted outsourcing agreement will help to bring control back to that area.
E) Greater flexibility
Outsourcing allows operations that have seasonal or cyclical demands to bring in additional resources when they’re necessary. The outsourcing company can then be released when things slow down again. Outsourcing contracts also gives flexibility during expansions of business. It is always a scalable model for any business.
Example: You might have an accounting department that is short-handed during tax season and auditing periods. Outsourcing these functions can provide the additional resources you need for a fixed period of time at a consistent cost.
F) Works as a business continuity plan
In many cases when businesses face challenges in running their operations, outsourcing helps to continue their work without hassle. The best example is when many states in the US get affected due to cyclones, the business over there get the work done from Indian partners.
Another issue associated with the business continuity plan is employee turnover. High employee turnover can add uncertainty and inconsistency to a business. Outsourcing provides a level of continuity to the company to reduce the risk of a substandard level of operation.