Outsourcing — An important tool to beat competitors
Welcome readers to Soven Developers. In this article, you will get to know… How outsourcing can help you in getting a competitive advantage over others? How outsourcing can contribute to the success of your organization?
Before moving further let’s build some basic understanding about outsourcing….
What is outsourcing?
The word outsourcing is made of two words that are out + source. It means transferring out some of the company’s non-core activities to outsider’s sources. It is a kind of business practice of hiring an outside agency to perform a few of the company’s services based on some agreed consideration.
Preferred sectors of outsourcing
Outsourcing, this word is now not new to the people. With the changing needs, requirements, and demands this definition has made people realize its importance. Nowadays, outsourcing practice is adopted by more and more firms for their efficient growth. The Major 7 sectors it includes are…
1. Call center outsourcing
2. Knowledge process outsourcing (KPO)
3. Data entry outsourcing
4. IT services outsourcing
5. Healthcare BPO outsourcing
6. Financial services outsourcing
7. Engineering services outsourcing
Facts showing the growing needs of Outsourcing
1. According to Statista, the global market size of the outsourcing industry has reached $45.6 in 2000 to $85.6 in 2018.
2. The IT-BPO industry in India has managed to aggregate the revenue of $154 billion in the year 2017
3. Over the upcoming 5 years, 40% of India’s workforce is expected to amplify the skills to meet the advanced requirement.
Well known examples of different companies that outsource
#Story 1:- WhatsApp
Before WhatsApp was purchased by Facebook for $19 billion. It was a small company with 5 part-time and 30 full-time employees. It then outsourced most of the work to Russian developers that help it to enhance its global reach and effective cost management.
#Story 2:- Alibaba
One of the leading Chinese retail and manufacturing shopping apps has also chosen to outsource and hired virtual assistance from India, linking up with copywriters from the Philippines, outsource copywriters from website development to US developers. Due to all these collaborations, Alibaba’s business took off well.
Unilever a European company dealing in a vast range of products involved outsourcing in his curriculum to get a competitive edge over others. In 2005, its leadership team made a strategic decision to integrate the company’s multiple businesses into single and create an ERP system to access the whole of Europe. Not being an IT solutions specialist, the company outsourced the year per development to external parties and these improvements directly contribute European 700 million annual savings on operating activities.
Taiwan based personal computer makers also outsource its branding and marketing strategy for more effective results. This move led to its access to fast-growing sales, more customers, and rising gain.
#Story 5:- P&G
American company P&G is one of the leading consumer durable manufacturing brands dealing in various product lines. It also outsourced some of its R&D activities. This boosted its innovation by 60% and generated more than $10 billion in revenue from over 400 new products.
It needs no introduction. It is a well-placed and renowned brand globally. The word outsourcing is not new to Google. Time to time, it outsourced its various activities to gain expertise and huge demand for its services among people.
Skype, Mark M series, Base camp. Transfer files, Microsoft, GitHub, Stack, and many more are there who have either taken or are taking the benefit of outsourcing.
What are you waiting for?
Competitive advantages of outsourcing
In this era of globalization, outsourcing is not a second thought. Ever-increasing competition and a dynamic business environment have set the standard bar so high that a company with a unique product and creative approach can successfully leave its mark. But let’s accept that a single person cannot attain excellence in all the fields. He needs help from a third party and outsourcing is all about that only. Following are some benefits of outsourcing that will turn you from” follower to leader” are:-
1. Immediate solutions with Expert opinion:-
Some issues take us a long time to resolve and can adversely affect our business performance. Whereas, Outsourcing such issues and activities can provide us immediate solutions along with expert opinion. As all outsourcers are experts in their respective fields.
2. Specialized services:- Outsourcing companies provide a vast range of specialized services like branding, management IT, HR, BPO etc.to one’s organization for its far reach and better development along with an attractive outlay.
It is a general mindset of people as they prefer to buy products and services of good quality only if available at cheaper rates. And various outsourcing companies can turn this dream into reality. It provides various services to its customers for effective cost management.
5. Cuts in unnecessary expenditure:-
Collaborating with an outsourcing partner can result in cuts in all kinds of unnecessary expenditure. As all stress and worries of management are transferred along with outsourced activities on an agreed consideration. Any cost above such is bearable by the outsource partner only.
6. Efficient utilization of resources:-
Any company by outsourcing its work to third parties can efficiently utilize its physical, financial as well as human resource. There is no wastage and duplication of efforts. The goal can be achieved easily, effectively, and timely.
7. Real-time processing:-
To get an edge over its competitors, companies need to work as fast as possible in real-time. All its records, data, and plans should be implemented and processed immediately. All sorts of activities, follow-ups should be done hand to hand. As ideas are there in everyone’s head but winners are those who come up with output first.
8. Access to Upgraded technology:-
Outsourcing provides its customers access to its latest and upgraded technology all the time. Without any burden of purchasing it. Investing a huge sum of money at one go is burdensome, especially for small scale businesses and startups. But with outsourcing, it’s all easy. Upgrading and adapting changes in the rule to lead.
9. Focus on priorities:-
By outsourcing its non-core activities, now the company can focus on its core activities that are the reason for which it is evolved or liked by the public. Just like Google outsources its marketing activities and focuses only on its technology up-gradation and enhancement.
Hope this article is worth reading for you. Please comment below, suggestions if any….