Cutting costs is just the beginning. The additional benefits of outsourcing lie in the value it creates.
- Improve company focus Outsourcing allows managers and key personnel time to focus on a business’ core competencies, where they are of more value.
- Access superior capabilities Outsource providers bring in-depth expertise in a particular area which helps companies better satisfy customers and increase productivity and efficiency.
- Access better technology You can tap into leading-edge technology that is used in conjunction with specified areas of expertise. Keeping up-to-date with such technology is timely and costly.
- Shared risk Outsourcing enables a company to share some of its risk, such as unstable workflow and capital investments. The outsourcing provider is able to spread those risks over multiple clients.
- Free-up resources Outsourcing allows a company to shift its resources to activities that have the greatest impact on bottom-line performance.
- Increase working capital The outsource provider share the investment as part of its own overhead.
- Improve cash flow Outsourcing a function that is currently carried out in-house may allow the sale of assets that are no longer internally necessary.
- Reduce operating costs An outsource entity can generally provide the same the function for less because of economies of scale, thereby reducing the functions cost to the business.
- Accommodate growth Outsourcing is ideal for companies undergoing rapid growth because expansion can occur more easily without derailing current operations.
- Alleviate management pressure Managing functions that can be outsourced is a significant drain on resources.
By Jennifer Pricci