Outsourcing the Positive Effects

Source: About outsourcing
Written by Winston Pepito
In today’s business world, the word “Outsourcing” is being heard more and more. It is being touted by some as the savior of companies while others treat it like a plague spreading through the business world stealing jobs from Americans. Whatever your personal view on outsourcing, it is clearly something that can no longer be ignored.

In fact, if businesses wish to remain competitive it is almost imperative that they outsource. With proper planning, outsourcing can save resources such as time money energy and even produce a higher quality end-product. How these savings are achieved will be explained point by point below therefore helping you understand why every company should consider outsourcing their non-core business operations.

Save Money
Let’s assume you currently have 20 employees doing routine data entry tasks; you would probably need around 1000 square feet of office space, which might cost you around $30,000.00 per year. You would also need 20 workstations, tables, chairs, etc. -- which might cost you another $30,000.00. You, of course, also have to include your salaries + labor burden and let’s not forget our other overhead items (such as electricity, ISP, telephone, water, office supplies, facility maintenance, computer repairs and upgrades, security and so much more) which we will round of to a conservative annual cost of approximately $500,000.

You can't manage twenty people all by yourself and hope to stay focused on your top line (well, you can, of course, if you work 18 hour days and quality isn't a concern for you), so you need to hire a Supervisor to manage the team and that's going to cost you as well (let’s say $40,000 per year). And then there’s the cost of hiring technical support for those guaranteed network administration and PC troubleshooting problems that will occur (another $40,000). Should I continue?

By outsourcing this work to a company who specializes in providing dedicated employees to your company, you won't have to worry about all of those issues, plus it will only cost you a flat fee of $1000/month per employee! This results in a direct cost savings of almost 70%, but for argument’s sake, let’s make it 40% to allow for any unforeseen costs that will undoubtedly creep up. Cutting costs by 40% is quite incredible, right?

Save Time and Energy
We are all familiar with the headaches that come from managing our human resources. The less people we have to directly manage the better. This frees you up to focus on other important business issues such as planning for business growth. You should be focusing more on the competition, refining business processes, and marketing, rather than spending your time interviewing people, performing quality reviews, dealing with employee problems, etc.

Outsourcing allows you to grow your staff without increasing the HR headache that can come from a larger staff.

Higher Quality End-Product
Because you are outsourcing a specific part of your process, the outsourced staff usually only have to worry about one single, repetitive task. Because they are so focused on that one task, they become very efficient and effective at performing this task resulting in a higher quality end-product. Also, because they are physically removed from your office, they don’t have to deal with the other distractions that can arise in an office and can remain focused on the task at hand.

With the money saved by outsourcing, specific quality staff that were once unaffordable can now be added to the process, also increasing the likelihood of a higher quality end-product. Finally, if you are outsourcing to a company specializing in your type of project, you can obviously expect a much higher quality end-product, since they themselves are experts in performing these tasks.

Once of the best outsourcing companies in the Philippines, based in Cebu City and known for its quality staff and superb customer support is Phil-Am Outsourcing Solutions Inc.