Why Companies Outsource? Reasons to Start Outsourcing

Amy Pattinson
August 17, 2022
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6
 Mins Read

Outsourcing is the process or a technique of delegating the various tasks to the external third-party agencies. In other terms, it is a contract made between the external agencies to perform certain business organization functions. For example, if a company focuses on website development as its core business, they do not find much time for accounting, payments, customer relationships, etc. Therefore, these supplement and non-core functions are assigned to external companies that do these tasks as their primary business. Invensis possesses deep-seated capabilities to scale up back office services by changing requirements, ensuring your project's continuity and on-time completion. This blog on "Why Companies Outsource?" explains the reasons why outsourcing in business is a truly complex question. Moreover, there are several reasons for outsourcing these business processes. Following are the key reasons to outsource the business tasks.

As we have discussed the overview of why companies outsource, we will now discuss its reason.

Reduced Operational and Labor Costs

Cost-cutting is the primary reason for companies outsourcing various processes. To improve the profits, companies are moving toward cost-cutting techniques. BPO companies offer all kinds of services for businesses with which the team size is reduced. It will reduce the office space, computer machines, salary, and other facilities offered. The cost spent on labor is highly reduced while outsourcing. With BPO, organizations can spend only on the requirement rather than paying the team irrespective of workload. The revenue for the company is increased directly with the help of a reputed BPO company. As BPO is pooled with talented people, the service quality and customer satisfaction are improved. It indirectly helps in customer attraction and also customer retention rate. In countries like India and the Philippines, outsourcing costs are very lower, where the monthly bill of an employee will be around $500, including everything. Around 84% cost savings are identified.

Saving Effort and Energy of Internal Teams

When the organizations focus on all tasks or functions, it will take more time and cost to complete. In addition to the time and costs, the effort and energy spent on these tasks from internal teams are not necessary. Organizations can easily complete the processes through business process outsourcing without relying on internal teams. The teams can thus = focus on the process that is on priority and provides growth to the business. The greatest advantage of BPO is to reduce the burden and complexity for internal teams. These teams can focus on their core processes rather than multitask to complete all the processes. All efforts and energy spent on the business will improve the quality and satisfy the customers with timely delivery.

Focusing on Core Operations of the Business

Business organizations have various operations, both internally and externally. The different teams in the organization traditionally perform these operations. It is good that make all the processes inside the organization premises. It increases security and has advantages in customer relationships. But, you cannot focus on the core operations that bring profit to the organization. Organizations always have to put most of their efforts into the core business rather than the small tasks that support the business. Even though they contribute to the growth, outsourcing them has various benefits. First, the tasks that require minimal focus are outsourced, which helps reduce the stress and efforts made. Organizations can focus on the strategic development and growth of the business, which produces more profit. According to the analysis of Deloitte, 36% of the companies report that they can improve core business strategy and plans with BPO services.

Reducing the Risks with More Opportunities in Scaling

Multitasking is not a skill for most people. It is essential to free up the employees to work on the core processes in a business organization. It will produce better results in terms of productivity and quality. If the minor processes in the organization are outsourced, then the employees can put their 100% effort only into the growth and success of the business. It also increases productivity. With innovative ideas, opportunities available in the market are grasped to increase the organization's profit. Advanced techniques and technologies help focus on the scaling of the business. Expanding the business improves the profit and brand image of the organization. BPO assists in reducing most of the risks on supplement processes and improving the quality of operations.

Access to Skills and Experience

Most of the organizational tasks will not directly contribute to the growth of the business. Only a very few are major, and they will contribute much to the business. Focusing on other tasks will cause risks to these tasks and, hence, affect the business's quality. With BPO, businesses enhance service quality. Experienced staff support from BPO companies helps complete the task effectively and quickly. Moreover, outsourcing is performed based on the talent that the company possesses. For example, if a company is good at accounting, the accounting processes are outsourced to high-quality, experienced staff. The availability of skilled people will differ among companies so that the required staff is outsourced based on companies. With the advances in technology, every process is outsourced. With BPOs, companies can provide 24/7 customer support at the same cost without any additional charges or minimal charges.

Conclusion

In the modern and digital world, outsourcing has become common globally. There were various advantages to outsourcing over insourcing. The most common benefits are cost and time reduction. Most companies outsource their additional tasks to core on the core business. It not only reduces the costs but also improves the business's revenue by increasing sales and profits. Thus, outsourcing is a definite need in the current decade, considering its benefits to companies. Invensis is a reputed leader in empowering numerous global businesses and organizations through high-quality back office BPO services that promote enhanced business efficiency and improved bottom line.

About Invensis

Invensis Technologies is a leading global provider of IT-BPO services with a reputation for excellence. Our carrier-grade infrastructure and commitment to empowering clients around the world to achieve business transformation and growth through our services sets us apart from the competition. With over 5,000 staff and more than 22 years of experience, our company has been providing quality services since 2000 from our Wilmington, DE office, with delivery centers in India.

Invensis delivers intelligent contact center and back-office functions for businesses. Invensis is an ISO 9001 and 27001 certified organization and has achieved HIPAA compliance to provide high quality and secured end-to-end outsourcing services. We have a strong base in the USA, Canada, Australia, UK, Ireland, Germany, and other countries serving over 200 clients. Creative methods and technological solutions drive Invensis, offering end-to-end automation from design to implementation and ongoing development and data security. Our solutions are tailored to help businesses achieve their strategic goals and help them become industry leaders.

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Amy Pattinson

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