Running a business is no cakewalk, and handling several departments at a time can be daunting. Imagine having skilled allies who swoop in to save the day, whether it’s managing customer support, designing a website, or handling your company’s accounts.
The 2023 Global Shared Services and Outsourcing Survey by Deloitte found that 31% of organizations added resilience and agility to their business models by increased outsourcing and shared services. Indeed, by outsourcing certain functions to third parties, like other firms or freelance consultants, you can focus on what you do best, while letting the specialists tackle the rest.
What kind of services can be outsourced?
Human Resources
Companies, especially small businesses outsource HR when the amount of HR-related work is not enough to warrant recruitment of inhouse staff. This allows the organization to benefit from expert services in times of need and free up time for themselves to take care of core functions. For example, a PR firm can hire a group of HR professionals to handle an employment relations crisis.
Before you approach an HR consultant firm, decide what kind of services you would like to outsource. Determine the terms of contract between you and the service provider. Try to explain in detail, what kind of help you are expecting, to avoid ambiguity in assessing the outcome. Keep the contract flexible to the extent that you can adjust the goals as per your needs.
You can outsource functions like employee recruitment, termination, training, sensitization or awareness programs, etc. HR professionals can provide on-site, as well as remote services. Similarly, they could provide a one-time service, or an on-going support service as needed.
Outsourcing HR services allows companies to cut costs on HR payrolls, gives access to cutting edge HR software, ensures better compliance from employees and benefit from the expertise of skilled specialists.
Financial services
Financial services like accounts, payroll processing, financial planning, and preparing reports can also be outsourced. Processes that are mostly repetitive and don’t require constant monitoring under expert eyes can be safely outsourced. For example, keeping track of assets and liabilities by taking care of accounts payable and receivable is a simple transactional function that many firms outsource.
Data Entry
Data entry, as the name suggests, involves feeding information into a database. It is one of the most time consuming and tiring processes in a business. But systematic compilation and maintenance of data is crucial for record keeping in any organization. Both small and large businesses might outsource data entry functions to reduce overhead costs, and allow employees to focus on more central aspects of the job.
Moreover, if the data is collected in more than one language, it might be difficult to find in-house employees who are fluent in multiple languages. In such scenarios, companies prefer to outsource the service to people overseas, or people in the same country who happen to be well versed in that particular language.
Data analytics
Data analytics is the process of analyzing raw data to find useful information and draw conclusions. For example, a retail store owner may collect data about customer orders and use it to identify fast moving and slow moving products and optimize stock levels accordingly, thus managing her inventory efficiently.
Data driven decision making can be a game changer for business growth and outpacing competitors. With the right outsourcing partner, you will have a team of skilled professionals by your side who have an intricate knowledge of the newest trends and technologies. In fact, the Deloitte Global Outsourcing Survey (2022) reported that 81% of executives rely on outsourcing partners to provide cybersecurity services.
Even companies who have an IT team may not be fully equipped to handle data analysis for various projects. While the IT staff looks after the daily operations and pressing matters, an outsourcing team can dedicate themselves to data analytics goals and outcomes.
Information Technology Support Outsourcing
An IT department is responsible for maintaining computer-related infrastructure, providing technical support to fix issues, handling electronic communications with clients and stakeholders, developing software programs for daily operations of the company, etc.
Companies may want to outsource functions like help desk support, data security, software deployment and management, network and server administration, etc. A 2022 survey showed that outsourcing for software development is expected to grow by 70% between 2022 and 2023. They noted that increasing preference for remote work has allowed companies to tap into a global talent pool.
Web design
A web designer is responsible for creating the visual elements and layout of a website. Their work involves understanding the client’s needs and translating them into a visually appealing and user-friendly website.
Outsourcing web design and development has become a game-changer for businesses seeking a strong online presence. By entrusting these tasks to external experts or agencies, companies can harness specialized skills and stay current with the latest design trends and technological advancements.
Customer care
The job of a customer care employee is to provide assistance and support to customers, addressing their inquiries, concerns, or issues related to a product or service. Outsourced teams are experts in customer service and use advanced tools.
This helps businesses handle customer inquiries smoothly, especially across different platforms like phone and email. It’s like getting specialized help without the hassle of managing a customer support team in-house. But, businesses need to pick reliable partners to make sure customers have a good experience.
Legal services
The legal team in an office is responsible for dealing with legal matters to make sure the company follows the law. They provide advice on business decisions, review contracts to ensure they’re fair and legal, and represent the company in legal matters if needed.
The legal team helps the company understand and navigate laws and regulations, reducing the risk of legal problems and making sure the business operates within the legal boundaries
Companies can outsource tasks like drafting contracts, conducting legal research, and representing the company in legal matters. This approach is particularly beneficial for small and medium-sized enterprises looking to manage legal costs effectively while still ensuring that their legal requirements are met.
Digital marketing
Digital marketing is a way of promoting products or services using the internet and electronic devices. It includes activities like advertising on websites, social media, and search engines. Digital marketers use tools such as social media platforms, email, and online content to connect with customers and reach a wider audience.
Outsourcing digital marketing services involves hiring external professionals or agencies to manage a company’s online advertising and promotion activities. This can include tasks like running social media campaigns, optimizing websites for search engines, and creating online content.
Outsourcing digital marketing allows businesses to stay current with online trends, reach a broader audience, and adapt quickly to changes in the digital landscape. For example, the content strategy of the world renowned company, Coca-Cola, includes collaboration with several outsourcing agencies for branding strategies and digital marketing, in an effort to maintain their uniqueness in the market.
How Can Companies Benefit from Outsourcing Services?
Access to Latest Technologies and Expertise
Outsourcing allows you to have tech-savvy collaborators who keep you in the loop. Without having to learn and manage everything in-house, you can benefit from the knowledge and skills of your outsourcing partners.
Let’s say you have a small business, and you need a website. Instead of hiring and training your own web development team, you can outsource the task to a specialized web development company.
They already have experienced professionals who know the latest web technologies. By outsourcing, you gain access to their expertise and ensure your website is built using the latest tools and practices without having to become an expert yourself.
Reduce overhead costs
Outsourcing helps save costs because companies can hire external experts or other companies to do specific tasks more efficiently and often at a lower cost than hiring and training in-house staff. It allows you to get expert advice without the added expense of maintaining a full-time team.
Saves time
Outsourcing saves time in several ways. One, you don’t spend time training your team to do certain tasks, or figuring them out on your own. Second, tasks that are outside your expertise don’t hinder your focus on core functions that are more central to your role.
Third, if you outsource your work overseas, you can ensure that work gets done seamlessly, round the clock. When you sleep, a team in a different time zone continues to work on a project, and things get done a lot faster!
How Much Do Outsourcing Services Cost?
The total cost of outsourcing includes the service itself, as well as other expenses like the office space used, hardware and software, and other devices used like copiers, telephones, etc. Moreover, the prices also depend on the type of service provided, the pricing structure of the company, and the geographical region.
In conclusion, outsourcing back office functions is a strategic choice that businesses can make to enhance efficiency and reduce operational burdens. By delegating non-core tasks to external experts or specialized firms, companies can streamline their processes, access a pool of skilled professionals, and benefit from cost savings.
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