ADVANTAGES OF OUTSOURCING
Understanding Outsourcing
In a General Description Outsourcing is an allocation of a Specific Business Process/Task to an External Service Provider who has an Expertise in that Particular Field. It has been Observed through the Research and Practical Analysis that the Organisations at time can not handle all tasks on their own .From Sole proprietors to Large Business Corporations, Outsourcing can always help you grow and Expand with Effective Cost.
Also There are a lot of processes the organisation has to Handle for a Small time and then have to Ramp Down. So in order to maintain Healthy Work Culture in the Company , ensuring Job Security of the employees , Companies Hire these Service Providers and get the Tasks done through them Efficiently.
This Business Strategy is not new , Starting back from the late 80s and early 90s for the basic purpose of getting an edge over Labor costs and Upcoming Demands in the Market.
At a time Outsourcing Services was more of a thing just for MNCs and no doubt they had perfection in it but that comes with more cost budgets and other factors. But Now in 2020 it is clearly seen that there are a number of Startups which have Expertise in the Services they Provide and they Partner with Big companies and Firms which help them Grow. Also
Outsourcing is not a Optimization Strategy it comes to be a necessary thing and is used to
- Grow business
- Launch a product
- Manage Operations is to be for certain tasks to an outside Vendor.
There is no Doubt that this Coined term has two faces but let's just understand the Impacts and Advantages of outsourcing to Indian market.
According to Statistics by Hexagon Consultancy , India’s outsourcing business stands at 118 Billion $ that clearly shows the Dominance in this Landscape.
Also According to Tholons 2016 Top 100 Outsourcing Destinations , Bangalore has the Highest share of Outsourcing Business in India followed by Mumbai Hyderabad and Pune.
Bangalore the Startup Hub of India Having the Highest Share Shows the Dominance by Startups in this Sector.
There are multiple Companies Like IBM , Vodafone , Telstra , BestBuy , Zomato , Samsung which outsource their back office services and have Gained Practical results and Growth in their Specific Service Sector.
Here are some Key Factors that are gained by Outsourcing-
Focus on Core Process:
Now when you are outsourcing a Work you have a free hand and head on your core task and that can help you Build your brand , Think more efficiently in Research and Development and Provide better Value to Customers and give a healthy competition to your Competitors.
Cost as an Advantage :
How? It's very Simple and most Obvious . There are tons of Freelancers and Startups with Innovative Ideas of Providing Service at a way lower Cost for Market Penetration. This Lower cost is also among key factors of Competitions among Service Providers which bring out the best opportunity to the Company that needs outsourcing Also Hiring and training staff is very Expensive and is not preferable for short projects .With good communication the outsourced work can be monitored and even for that you can hire a part time Freelancer . With the new Remotely Monitoring Systems it is easy to see the epicentre of the Problems thus overall reduces Expenditure in a tremendous amount.
Increased Efficiency:
Now this is Something which is inter related to all the pros and cons why? The core Purpose of outsourcing partner is to provide Expertise in Delivering solutions to Complex problems. Hence the more efficient the Service provider is , the better chances they have to set a place in their market .This leads to an Increase in original company’s Productivity and Create ultimate Brand awareness for the Company which outsources
India’s Outsourcing Policies:
Outsourcing is one of the main income source of foreign income for Indian economy.For a time like this Post COVID-19 a lot of countries have pulled out from their Manufacturing sector China
Like Japan and the USA. Hence we have a History of very Friendly Policies so that Companies can easily outsource tasks in India. From 50 Billion $ in 2010 to 118 Billion $ in 2016 India’s growth in this is Remarkable. Hence this seems to be a lot ofCompanies to Invest in their Outsourcing as well as Manufacturing parts in India.
Productivity and Better Customer Service Support:
Now there are MNCs which operate in a lot of Different Time zones and need commands in Different languages as a customer Support. It has been observed that tasks like these are Outsources maximum number of times to get Best Results. If a company is good in Customer Support this Always adds great value to their Brand Image and acts as an Advantage in competing with other companies in the same Domain .
E-Commerce Industry Catching up:
This is one of the Areas where India has had tremendous dominance in the last few years. The companies Like Facebook have Invested Billions of Dollars in Reliance , Promoting the same. We know now as the Jio mart which is Just Introduced. E commerce companies Outsourced their most of the services and hence gained maximum Profit. This is the reason they can work on their Technology , their Brand awareness, Product enhancement more than any other Industry and give Maximum Output.
Managed Risk:
Now Outsourcing manages Risk ! First of all you have Hired a cream of players for your company at a lesser cost than Big MNCs . Now this decreases the probability of risk because they are working on it to manage the risks. This Protects their relations with your company and also makes them Best Market players paving and placing their own place in the Market.
Getting Maximum from Outsourcing:
Now by this time all points may be clear but to get maximum here’s the thing. Don’t just look at the cost of hiring Training and management v/s outsourcing the task or even handling the same task with current employees , look at the Value Provided that helps you in Long run. Look that is going to help and work as marketing your Brand name in an enhanced way or Disappointing you or not Surprising you with good Results. This Can help your business to Grow immensely and Rise Far above the Competition .
-Tanishq Agrawal
