How Outsourcing Can Help Your Business

Whether you are an entrepreneur, a small business owner or work within a large organization, outsourcing can be of great benefit to you. Knowing when to take advantage of outsourcing options and to make them part of your day-to-day business operations is something that will boost your growth and, ultimately, your bottom-line. This backed up by the fact that outsourcing is more popular now than ever before. If you are still not sure about venturing into the world of outsourcing, then you maybe a quick review of your current situation will help. You can start by asking yourself a few questions:

- Are you always in a time crunch trying to keep ahead of client or customer needs?

- Do you have often find yourself missing project deadlines because you do not have the resources available to complete them on time?

- Do you find yourself, or your employees, spending time that could be used on other tasks to do tasks that require little or no training?

So did you answer yes to at least one question? If so you should take outsourcing into consideration. Outsourcing is an easy way to allow you and your staff to expend their energies on core competencies and to leave some important but non-critical projects to a provider that you have hired by outsourcing. It is likely that you will see bigger profits if you take advantage of outsourcing because outsourcing allows you and your staff to stick to the bigger money making projects and allow smaller projects to go to your outsourced staff. What then, can you outsource? Well, outsourcing is a great option for, amongst other things, the following: accounting, payroll, typing, data entry, transcription, email services, mailing services, customer service, website creation or maintenance, research, data mining, tax processing or preparation, marketing, digital image editing, office management and client maintenance.

So, basically, you can outsource anything and everything if you wanted to. If you decide that you want to outsource any part of your operations then you should ask companies in your area for recommendations on good outsourcing firms or search the internet for a list of outsourcing companies that offer the services that you need. There are lots of good companies out there who you can outsource to, so with a little bit of research, several phone calls and a few meetings, you will be sure to find a suitable one. Going with the first company that you come across is a risky approach. Any mistakes could leave you out of pocket, so it pays to take a cautious approach.

The Economic Effects of an Outsourcing Company

Outsourcing, as controversial as it is, is now an accepted business practice. The potential savings that a company can experience by deciding to outsource non-core functions makes it an appealing practice. The possibility of offshore employees being trained such that their competency and quality of service equal home-grown employees at a significantly lower cost is a major incentive. The list of outsourcing advantages is difficult to ignore. There are also benefits in it for the economies of the countries where the jobs are to be outsourced.

One of the first benefits that SEO outsourcing has for economies is the boost in employment. Any country where the operation of a large multinational corporation sets up shop will see it. The infrastructure will need to be built, which means more work for the local construction industry. Once the building for outsource operations is complete, not only will it need to be staffed with workers specifically for what the company wants, but it will also need support teams. These teams take care of back office functions, building maintenance, and security. All of these positions will need to be filled, and the increased percentage of the population with employment means a boost in the local economy.

The economic boost also yields an interesting side effect. Businesses need office space, and that demand for space requires infrastructure. Developers realize this and capitalize on building commercial office space buildings that meet suitable standards. These buildings, however, are not the exclusive domain of a company's operations to outsource. Other companies or businesses can take up the additional space, boosting revenues for the building's owners and providing employment at the same time.

In some instances, call center outsourcing firms forego renting space and instead pay for the construction of a building or facility for their own use. This creates an interesting scenario. Aside from the obvious benefits that the construction and subsequent employment brings, these areas also tend to attract other businesses. The employees within the facility, for example, still need to eat. Fast food chains, convenience stores, and other similar businesses are known to build near these offices. The businesses that cater to these employees need to be staffed as well, providing an additional boost to employment.

SEO outsourcing and IT outsourcing also lead to a possible increase in trained personnel in the country. As the demand for certain skills rises due to outsource jobs requiring them, the number of people studying to acquire those skills can also see an increase. Some of these skills can be self-taught, but others cannot be. This opens up possibilities both for academic institutions and businesses to offer courses for training people. Depending on the demand for these skills outside of IT and SEO outsourcing firms, these can potentially get hundreds of students enrolling. The increase in the talent pool then serves to encourage more investment from companies that require such skills.

In terms of economics, outsourcing advantages manifest for both the company that needs it and the country that provides it. The decision to outsource may lead to a number of political conflicts, but the economic benefits are beyond argument. The company saves money and can focus on its core competencies, while the outsourcing provider experiences a boost in its economy and foreign investment. It is a win-win investment for both parties.

Outsourcing - Success Tips Part 1

One needs to understand that outsourcing success really depends upon how well one manages the process before and of course after the outsourcing contract is signed. A lot of companies are known to award outsourcing contracts to the lowest bidder without taking some time to understand what it really means to the business and they also outsource without performing a complete vendor selection process. So when things start to go south, such as missed delivery dates, quality problems arise or awful customer service, the blame-game card is played and everyone start to run for cover.
Well, the following tips for successful outsourcing will sure help you make sure that your organization succeeds in outsourcing and that you will achieve desired results.
1. Make Sure That You Outsource for all The Right Reasons
When you take a bad business process and outsourcing, what you actually do is to make the problem a whole lot worse. Look, you have to understand that an outsourcing company should add great value to your business, but they should not in no way be relied upon to fix the issues that are inherent in your business. For instance, if your Information Technology (IT) department is regularly missing deadlines because the users keep changing their minds, when you outsource this function, this will surely result in much higher costs and higher of course higher levels of frustration.
2. Careful Vendor Selection Process
According to a recent outsourcing report, 35% of executives who responded said that they wished that they have taken more time on vendor selection and vendor evaluation before they signed an outsourcing contract. Let's face it, most times outsourcing decisions can be a wee bit distorted by emotions and influenced also by company politics as well. A successful and thorough vendor selection process will help remove the emotions and also control the company politics as well.
3. Make it Measurable
Also, according to the same outsourcing report, 49% of the executives who responded said that they really should have defined the realistic service levels that go hand in hand with business objectives. If one does not take time to analyze and also define quality measures and or service levels, just think about, how on earth will he or she know if the outsourcing vendor that he or she has chosen is really performing up to his or her company's standards, huh?!

You can find outsourcing tips in my new book "Outsource This!" Check it out.

The Pros and Cons of Outsourcing

We have been hearing about the wonders of outsourcing when it comes to companies all over the globe. We also have been hearing how it has become the best and absolutely the most logical choice for many companies when it comes to getting their jobs and projects done. But of course even though it may be the best choice out there, it should always be known that there are always two sides of the coin. But before we get into outsourcing pros and cons, let us first define what outsourcing means.

What is outsourcing?

Outsourcing is the method used by numerous companies to get jobs done with the help of a third party. From the term itself, outsourcing enlists the help of a third party. This is someone from the outside who works as a resource and helps them out to lighten the work load.

What are the outsourcing pros and cons?

There are many outsourcing pros and cons out there but let us discuss only the basic and most important ones. The first pro is the efficiency of work when outsourcing is enlisted by a company. When a company uses outsourcing, they enlist the support and the help of numerous people to do the job.

With outsourcing, there are more people doing one project and a project that takes days or even weeks to finish can get done in a matter of just days. Another pro is that there exists a good variety of resources. This variety may be seen in the work output provided by the different people working on the job that are not really from the company. At times these resources are even from another country. With the help of the internet, outsourcing is possible in different nations around the world. And of course, another pro is that outsourcing saves money for the company. Hiring a third party to take care of things is tons cheaper when compared to doing it on your own.

Now let us discuss the cons of outsourcing. A common problem of outsourcing is the energy it requires to get things together. One must be good in management of the business in order to get things done via outsourcing. This is because the manager will have to communicate with all the outsourcing support, one by one, telling them what to do, updating them and checking up on them to find out whether or not the work is done. But beyond that, after getting the hang of things, it will be a smooth sail.

These are the outsourcing pros and cons.

Outsourcing - New Hot Spots, Competition, and Questions of Longevity

As supply chains become increasingly complex, companies in the UK and US are turning to other regions to outsource a host of operations. The benefits of outsourcing are manifold but, needless to say, increased efficiency and lower costs are the main reasons for turning to this method of conducting business. As a result of the need to outsource, several regions are showing signs of significant growth and are becoming outsourcing hot spots.

China and India are perhaps the two largest emerging markets, and predictably so. However, Eastern Europe is also proving a hot spot, with countries like Poland demonstrating the capability to become an outsourcing hub.

Author of A.T. Kearney's Assessment of Excellence in Procurement, John Blascovich, anticipated several years ago, when the study was published, that these regions would see increased demand. "The number of companies sourcing from China, Eastern Europe and India has increased significantly in the last five years and will continue to rise in the future," he wrote in 2005. He predicted that by 2009, 72 percent of companies would be sourcing from China, rising from less than 30 percent a decade earlier.

Interestingly, a recent study by Gartner has revealed that both India and China are the largest countries in offshore outsourcing. What the report also reveals that was not predicted, perhaps even just a few years ago, is that several other countries in the Asia Pacific region are strengthening their positions. While India is top of the 10 Leading Locations for Offshore Services in Asia Pacific and Japan for 2010, Malaysia, the Philippines and Vietnam are likely to become competition. Meanwhile, Indonesia has entered the top 10 for the first time.

"Some of these countries have invested considerably and leveraged increased demand for lower cost services," explains Jim Longwood, research vice president, Gartner. "The global financial crisis forced many organizations to place a greater emphasis on cost optimization."

Of course, the recession played a large part in the rising popularity of India, China and Eastern Europe as outsourcing focal points. As companies looked to cut costs in order to survive, outsourcing became a necessary solution. Labor costs in particular are much lower in countries like India and Poland. Consequently, large organizations are choosing to locate their contact and call centers overseas. US companies have embraced the trend, locating call centers in India and the Philippines. "Wages for labor in countries like India and the Philippines, which have large workforces, can be 80 percent to 90 percent lower than [those] of U.S. labor," says Datamonitor analyst Daniel Hong. While wages are considerably lower, the workforce is more highly qualified than the equivalent workers in the US and UK. Certainly, this adds to the attraction.

Everest reported in March that the global procurement outsourcing (PO) market grew rapidly in 2009, with new contract signings and extensions up 30 and 90 percent respectively. It now expects the market to grow more than 20 percent this year and reach an annual contract value of nearly $1.3 billion.

However, several studies have also shown that there can be disadvantages and unknown risks associated with this emerging trend in outsourcing. Companies should be aware that labor costs might be considerably less, but the cost of telecommunications and IT can be much higher in India, for example, than in the US or Europe. In fact, nearshore outsourcing can be more cost effective. Datamonitor has reported that labor in Mexico can be 50 percent cheaper than in North America, while Canada's wages are 30 percent lower. In addition, both countries already have much more cost efficient telecommunications and IT systems in place.

So the state of the current outsourcing market has proved earlier predictions correct. India, China and Eastern Europe may be outsourcing hot spots, but they look likely to face stiff competition from the Asia Pacific region. Meanwhile, as both North America and Europe emerge from the global economic downturn, this could have an impact on the popularity of offshore outsourcing. Could nearshore outsourcing experience significant growth as a result? Either way, China and India will remain outsourcing hubs, as long as the cost of labor stays low while both countries' technological resources improve.

How Outsourced IT Can Help Your Business

HOW CAN OUTSOURCED IT SUPPORT HELP MY BUSINESS?

When approached correctly, outsourced IT support has the potential to powerfully transform your business, lower your overheads and maximize your profit. Getting your IT support requirements handled by a team of experts who can do the work faster, better and more cost-effectively makes sense. Essentially, outsourced IT support frees up your time and allows you to concentrate on what is truly important - growing your business.

Large corporations have recognized the significant advantages of outsourcing for over a decade - in fact, the vast majority of academic research clearly indicates the effectiveness of outsourcing as a business strategy. Now, in this new decade, small business is increasingly utilizing outsourcing as a way of becoming more competitive and making a positive impact on their bottom line. At a glance, the key advantages of outsourced IT support are:

• Reduced wages and lower overheads
• Increased profit margins and enhanced productivity
• Greater technological expertise and customized support
• Flexibility to precisely match labor supply with business demands

One of the strongest advantages of outsourced IT support centers on the basic principle of supply and demand. When a business experiences an increase in demand for its products or services, the level of IT support required increases. When business drops off temporarily, there may be little need for IT support as demand decreases. Outsourced IT support allows businesses to perfectly control expensive labor costs and pay for services on an as needed basis. Think of outsourcing as a tap that allows you to turn the water supply quickly on and off - there is no need to leave the water constantly running by wasting money with permanent IT staff.

Because technology is always developing and rapidly changing, it can sometimes be hard to stay on the cutting edge. Most businesses benefit from strong IT solutions that are customized to meet their particular requirements. It can be very expensive and time consuming to source and retain staff that have exactly the right knowledge and experience to support your business.

According to a study published on the Microsoft Academic database, the IT outsourcing market has doubled over 7 years in America, from 76 billion $US in 1995 to 140 billion $US in 2002. This clearly shows that many businesses in America find outsourced IT support highly cost effective. Outsourced IT support also allows you to access more highly qualified and experienced professionals than you would normally be able to afford. With outsourcing comes greater technological expertise and customized support. It is important to remember that communication lies at the heart of all successful business relationships. To make the outsourcing relationship work, you need:

• A clear sense of what you want your business to achieve
• Goals defined by you for the outsourced IT support provider
• Clear timelines and an understanding of the level of support needed
• Flexible strategies to deal with problems that may arise
• An agreed upon cost structure, including contingency plans

Outsourcing Pros and Cons - The Advantages

Outsourcing is becoming an extremely viable alternative to doing all the work in your business by yourself, for many very valid reasons. Outsourcing first came about as a way companies, and individuals, could lower costs by having assembly and manufacturing done in countries where costs were much lower, with no loss of final quality. This was mainly due to lower average wages, and lower operating costs. Obviously cost reduction results in vastly improved profit margins for these companies

Recently however, outsourcing has been gaining in popularity due to several other causes. Cost reduction is still, of course, a major factor, but other advantages are becoming apparent, such as the possibility of having industry experts work with you, access to a much larger workforce, and far more capability to react to fluctuating market conditions.

Outsourcing Pros and Cons - Cost Reduction

As mentioned previously cost reduction was the original benefit of outsourcing, and although this is still one of the main advantages, other vital benefits are coming to the fore. Individuals are now looking to outsource tasks which would be difficult and costly to complete single handed due to lack of time, or knowledge, or both. A prime example would be a software task, which without the benefit of an on site expert would be either delayed or postponed. These tasks can now be completed by using outsourcing, in very short time frame, and at an affordable cost.

It would be very costly to employ an in house expert, especially if the task was a short term, one off requirement. Outsourcing will allow you to employ the right person, or people, at the right price, for just the duration of this one task. As your business grows you will be able to go back to the same people time and time again, as your work relationship builds with them.

Outsourcing Pros and Cons - On Call Expertise

We have discussed how having experts in specific tasks can result in cost savings for the company, but there is a further benefit in that having qualified experts virtually on tap, you can go after larger, more specialized types of contract, now you are able to take on far more advanced projects than previously.

Outsourcing Pros and Cons - A Larger Workforce

Yet another advantage of using outsourced specialists is the ability to have far more manpower when needed, without the hassle of having to maintain your own employees. By outsourcing you are able to bring in additional expertise, in just the right fields, as and when needed, without having to concern yourself with keeping them fully employed when the project ends, or having to lay people off when workload drops. If your particular field has peak periods of intense work, followed by troughs, then this facility becomes especially valuable to you.

Yet another advantage of outsourcing is that by having a larger, flexible workforce, you can generate far more profit. Smaller companies can find themselves at a disadvantage when going for contracts against large companies, outsourcing gives the flexibility to overcome this disadvantage.

Outsourcing Pros and Cons - More Flexibility

Everybody has probably experienced the situation where all is going to plan in a project, then a problem arises, completely unexpected, and therefore unplanned for. Small companies will at this point have a problem due to time schedules, however if outsourcing is now brought into play, additional expertise can be brought on line, in exactly the right areas, to bring the project back on course.

Outsourcing Pros and Cons - Summing Up

Having taken on board all of the above benefits of outsourcing, it can be seen that with a little preparation beforehand of where and how the relevant expertise can be found, outsourcing can be used to great advantage in advancing your business, whether you work alone, or run a company.