Use outsourcing to reduce your costs and increase efficiency

Being your own boss and running your own business provides the ultimate in freedom, but it brings plenty of challenges. There are new competitors entering the market all the time, and customers are better informed than they have ever been on the choices open to them. Business owners are faced with a constant battle to both improve their products or services and to keep operating costs to a minimum.

An effective, yet often overlooked, way to achieve the latter is through outsourcing. When the strategy first hit the headlines in a big way in the 1990s, it was met with suspicion, largely because, when pursued by major corporations, it inevitably meant reduced headcounts and layoffs. However, the strategic benefits, for businesses of all sizes, are irrefutable.

Cutting costs

Employing staff costs money, and it goes way beyond the salaries. There are also recruitment costs, admin costs, training and development expenses and the raft of benefits you have to pay out. Also, keep in mind that the more staff you have, the more office space and equipment you are going to need.

Outsource your non-core functions, and these costs evaporate, to be replaced by a known monthly charge. Not only is it more cost-effective, it also makes the budgeting and forecasting process far more straightforward.

Improving quality

Outsourcing 101 states that you focus on your core activities and skills, and outsource the rest. Inherently, this makes sense. Unless you are a catering company, you really don’t know much about catering – so why employ a catering team when you can place it in the hands of people who are expert in this field? Another example is IT. Ten years ago, most businesses had an IT department, whether it was a team of staff or a single individual.

But when you look at a website like this one and see the levels of skill and expertise a professional third party can bring, it becomes clear that this is something with which an in-house team simply cannot compete.

Increase efficiency

The other benefit that comes of outsourcing non-key functions, particularly ones like IT, is that it is an enormous weight off the shoulders of the management team. The IT system is very much the lifeblood of a modern organisation, so it needs to be given priority attention.

Choosing the right software systems, backup regimes, user interfaces and all the rest can have a significant impact on the bottom line at the end of the year. A third party provider who is an expert in the field can make the right calls, whereas a business owner might spend weeks fretting over what choice to make – and then make the wrong one.

Outsourcing is one of the most valuable strategies for cutting costs, increasing quality and enhancing operational efficiency in organisations, and makes every sort of sense, whichever angle you approach it from. Keep it in mind as a way to ensure your business stays competitive in these challenging times.

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