Several popular and cost-conscious business enterprises around the globe are turning to counties such as India for business process outsourcing. Due to this reason, the term “outsourcing” is popularizing. If you are curious about reasons for the buzz for outsourcing these days, let us look at a few of the prominent advantages of outsourcing.
The Cost Advantage
The most significant advantage relates to the reduced costs that are associated with outsourcing business processes. Some specific jobs or tasks can be completed with reduced cost and higher efficiency, needless to mention, the reduced time taken to finish the job efficiently. The companies have to their advantage, the wage differences between the two countries involved in outsourcing. For instance, let us compare the wage rates in western countries and Asia. When compared to the western countries, a task can be completed at a cost that is 60% lesser in Asia. I would also like to add that, low cost doesn’t necessarily mean that the quality of the work done has been compromised.
The Efficiency Advantage
When a company outsources certain business processes to another company, the efficiency rates are higher. For the company which is outsourcing, it might just be one of its business processes. However, for the company that has received the outsourcing contract, it is their lifeblood and area of expertise. Thorough understanding and knowledge put into this domain results in higher efficiency as well as productivity.
The Focus Advantage
Once a company has outsourced its lesser important functions to other companies, it now has more time and energy to focus on core business functions. A few of the examples of core business functions that the outsourcing company can now focus on are brand building, value-added services, and research and development, etc.
The Skill Resources Advantage
A company that has decided on outsourcing some of its business processes, no longer require to spend a fortune on recruitment and training employees. Yes, that is right! The business enterprise doesn’t need to recruit trained professionals to complete tasks that require higher efficiency. This is because the firm that has taken up the outsourcing project will take care of this requirement. Moreover, it is the area of expertise of the company that deals with outsourced projects on a daily basis.
The Time Zone Advantage
In most of the cases, there is a time difference between the company that has decided to outsource and the company that has taken up this project. Therefore, there is the advantage of getting the work done even if the former company is having a long list of holidays. The work will not get affected.