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Business Outsourcing for Efficiency

Jul 2, 2008
Business outsourcing has become significantly more popular over the last five to ten years, particularly to cheap labour economies such as Romania and India. Thanks to the Internet, business outsourcing can be conducted competently and cost-effectively, particularly on the services side of business, with very little hassle and just as efficiently as with in-house staff. Add to that the natural cost advantages of outsourcing to freelancers and third party service providers, and the benefits of outsourcing rather than complete in-house become much more obvious to the savvy business owner. But to what extent can outsourcing business processes improve efficiency, and how best should business owners go about ensuring they achieve that goal?

Business outsourcing is generally firstly efficient in the sense that it lowers costs as compared to hiring in-house staff. When hiring staff, there are initial HR and training costs to consider, along with the initial inefficiencies involved while they learn their trade. Add to that the ongoing salary expenses and the taxation and NI burden that brings, along with sick leave, maternity leave and holiday pay, and you've got yourself quite a costly relationship, particularly for smaller businesses. However business outsourcing can minimize those expenses significantly. There is no real need to advertise or train staff, and the burdens of HR are taken over by the third party provider. Likewise there is a lesser tax bill to pay on salaries and there are no legal requirements other than those of your business outsourcing contract to adhere to. And when you're outsourcing to cheap labour economies, the process becomes even cheaper still.

Business outsourcing is also beneficial from the perspective of drawing on the experience and skills of competent staff. Rather than having to dig deep to find fully qualified, experienced staff members, simply approaching a third party outsourcing service can give you access to those kind of skills for a fraction of the cost and hassle you'd normally expect. Furthermore, with the business outsourcing process you are also outsourcing all the hassle and inefficiencies of working with employees, to enjoy cost savings overall as compared to having to employ casual but highly skilled labour on a project by project basis. Thus in this sense also, business outsourcing would seem to be the sensible option.

For any smart business owner, it's obvious that the advantages for outsourcing are there to be leveraged to your advantage. From payroll systems to website design to data entry, the opportunities for outsourcing, particularly to foreign shores, are endless, and the cost savings that can be realized make it an attractive proposition for any business owner. Of course, the process is not without its own problems, and business outsourcing can on occasion appear to be inefficient where a poor agent selection outcome is decided. However upon finding competent third party service providers, there really is no reason for your business not to benefit from the plus points business outsourcing can bring, particularly when given the cost savings and improved efficiencies afforded by the business outsourcing process.
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