Are you conflicted between hiring resources and outsourcing the whole process to a third party service provided? This guide talks about the pros of outsourcing. Please note that outsourcing has its risks and it is advised the thoroughly investigate the firm or the individual before signing a contract. However, lets go over a few reasons why you should take the pains to do so.

  1. Lower Cost:

    As the old saying goes, it’s all about the money. The fact of the matter is that most companies wouldn’t be sending jobs overseas if they weren’t saving money. Lower wages are a huge factor when outsourcing, and the top reason companies choose to send parts of their operation overseas. When properly executed it has a defining impact on a company’s revenue recognition and can deliver significant savings.

  2. Concentrate on Core Business:

    Companies also choose to outsource or offshore so that they may continue focusing on their core business processes while delegating mundane time consuming processes to external agencies. This is done to free up time to focus on core business processes. Without having to run an accounting department or an IT operation, companies are able to direct their scope to work on what really matters inside their business, increasing work flow and allowing managers to finish projects faster.

  3. Global Knowledge Base:

    Outsourcing and offshoring also enable companies to tap in to and leverage a global knowledge base, having access to world class capabilities.

  4. Tax Breaks:

    By handling business overseas, businesses are able to take advantage of lower corporate tax rates. Countries like Ireland, Hong Kong, Singapore and Taiwan have very low corporate tax rates, which can have a dramatic impact on a company’s bottom line should they outsource certain services there.

  5. Improved Service:

    Believe it or not, outsourcing can actually help improve service. Why waste time and valuable resources training an in-house customer service team when there are professionals to be hired that can usually do the same task for less money? IT performance, HR functions and financial services are some of the most commonly outsourced jobs, and companies all over the world have been working in those specific fields for years. Having an offshore company handle non-core business activities usually leads to better service.

  6. Risk Management:

    Going along with No. 10 on this list, risk management is another top reason why companies choose to outsource. If a business is launching a new product or offering something new, having employees in developed nations offers little in terms of risk management should the product not do well on the open market. With offshore workers, operations can quickly be fine-tuned to meet a skyrocketing demand or a demand that never comes into fruition.

  7. Freeing Up Internal Resources:

    Freeing up internal resources that could be put in to effective use for other purposes is also one of the primary benefits realized when companies outsource or offshore. Why waste people in areas that don’t focus on core business functions? Capital and people are becoming higher commodities in a difficult financial environment, and companies need as many good people as possible to focus on what really matters with a business. By outsourcing lesser services, companies free up time and capital to move their business forward.

  8. Peace of mind:

    By delegating responsibilities to external agencies companies can wash their hands off functions that are difficult to manage and control while still realizing their benefits. While the uncertainty surrounding outsourcing contract negotiations can be unsettling, companies often feel a sense of relief once people start signing on the dotted line. Contractual agreements offer protection for both parties, and remove any nasty human interactions that can take place when in-house workers are dismissed. Outsourcing companies can also be held responsible for negligence and poor performance in legally binding contracts, further aiding the outsourcing drive.

  9. Efficiency:

    Many times stranded with internal resource crunches, many world class enterprises outsource to gain access to resources not available internally. Odds are, your company isn’t an expert in IT management, HR services or accounting functions. Companies can spend weeks, sometimes months, just finding people for a particular in-house department. From there, you’re forced to train people and really adjust on the fly. At the end of the day, businesses can be left with a hefty bill with little to show for their money. By simply outsourcing basic business services, companies are able to jump right to the finish line when building a department.

  10. Flexibility:

    With uncertainty surrounding today’s global economy, companies need the ability to expand or downsize quickly. Unfortunately, that’s not always possible with today’s labor laws, as employee lawsuits are at an all-time high. By outsourcing, companies take that risk away, allowing businesses to adapt more quickly to rising or slowing demand.


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