Over the decades there have been vast modifications and advancements in how a business is conducted. Not to mention, the growth of industrialization that has pervaded globally. This includes the utilization of technology in various fields of business. Technology has allowed firms to employ methods and techniques which help them to advance over time and assist them on the road to success. Nowadays most of the marketing, selling, and even launching of a business online can be done via the internet within a matter of few minutes. Today, businesses are easily able to employ creative strategies and yield great benefits from them.
In this article, we will be focusing on one of the business strategies: Outsourcing. Outsourcing has gained popularity over the years. It was first recognized as a formal business strategy back in the 1980s and throughout the decades has been exercised effectively. In simple words, it is a practice that is carried out by a firm or cooperation that comes into agreement with a third party who then provides them with the services they require. It is to be noted that even though these services can be provided by hiring qualified employees or well-trained staff, businesses avoid doing so and rather prefer outsourcing to be the better option. A few of the reasons are listed below:
Reduced Labor Costs: This includes salaries for personnel, overhead, and technology. Outsourcing rids the business of these extra costs which allows room for profit.
Flexibility: In the case of a business not being able to continue operating in its official workplace due to some reason, like the holidays for example, then it can hire an outsourcing agency to continue the work which was being done in-house until the holiday season continues. In this way, the operation of the business does not halt and thus results in no loss.
Satisfactory Customer Care: When a business is much more focused on its core aspects then they often don’t have time to build a qualified customer support team that can ensure customers’ needs are met and queries are addressed. In such scenarios, an outsourcing agency comes handy as they can provide gratifying services which will in return increase brand loyalty.
Increased Productivity: As the third-party deals with a particular aspect of the business, the business itself focuses on other aspects (usually the highest priority ones) which leads to better ideas and thereby improved results.
Experts at service: At times an outsourcing agency (or a third party) can help get the best employees having great talent and experience whose contributions to the business might end up delivering fruitful results
A feature of outsourcing is that it provides extended benefits regardless of the sector/field/business/cooperation. We will be discussing a few of these benefits for different services in companies.
- Legal Services:
Every company has some legal work that needs to be maintained and regulated so instead of going to legal firms which can have huge costs, companies usually outsource and get the work done at a much lesser cost with the same quality of work. Outsourcing legal process services allows a company to have attorneys readily available which means that legal work can be done at any time of the day aka support readily available. Moreover, there are experts and professionals all over the world so outsourcing legal services means working with experts who can provide the best legal process services. Not to mention, best of the legal services are provided in a short time frame thus reducing turnaround time.
- Bookkeeping Services:
Bookkeeping services are a part of every small business as well as big organizations. These services are a process of keeping records of financial transactions and preparing financial statements. Bookkeeping is usually an important part of a small business. When small businesses outsource these services, they can get access to some of the best software; without outsourcing, they would have to buy software, license, and a few other things which can become hectic. Also, outsourcing would mean services will be provided by a much more experienced team who would deliver services while maintaining the accuracy of records whereas an inexperienced team might make blunders which, in the case of bookkeeping, can become problematic. Besides, outsourcing means getting access to many more services than one or two bookkeepers could offer (this is especially beneficial for small businesses).
- Accounting Services:
These services are the most crucial ones since accounting means working with numbers and following formulas so if one messes up then things may become complicated for the company – one of the consequences is reputational damage. To prevent any potential complications, outsourcing is done for these services to hire experts who can provide satisfactory results. Hiring an accounting firm for these services saves up heavy costs as hiring one or two experts in-house can be comparatively more costly. Outsourced accounting firms ensure that services provided are sufficiently good so if they diagnose a problem into which they need insight, they call in other experts and further maintain accuracy by fixing issues if required. On the other hand, if they diagnose something which requires the businesses’ attention then they report the problem instantly.
All in all, outsourcing has become a global industry. It has provided countless benefits to companies and continues to do so. It is growing day by day and is expected to grow furthermore in the future. It is currently expected to generate $731 billion in 2023. Each year, billions of dollars are invested in the industry, and masses of people from all over the world join the industry; the same trend is likely to continue – and even rise – in the coming years.
References:
- https://www.investopedia.com/terms/o/outsourcing.asp
- https://www.forbes.com/sites/forbestechcouncil/2021/05/14/six-reasons-outsourcing-could-benefit-your-business/?sh=e9af6504a238
- https://www.outsourcinginsight.com/outsource-legal-services/
- https://www.accountingdepartment.com/blog/top-benefits-of-outsourcing-bookkeeping-for-a-business
- https://www.gsquaredcfo.com/blog/benefits-outsourced-accounting
- https://explodingtopics.com/blog/outsourcing-stats
