Outsourcing: A Tool For Small Enterprises To Become Efficient & Grow Faster
“If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.” – Lee Kuan Yew, former Singaporean statesman and lawyer
Outsourcing offers a lot of value for small enterprises that are experiencing growth yet want to keep costs down. Apart from cost-cutting, another reason why small enterprises
seek outsourcing providers is because they need a dynamic route to innovation.
Businesses are increasingly hiring external parties to:
• Generate ideas for new services and products
• Develop strategies to bring these new ideas to market
Indeed, outsourcing has evolved and helped transform small enterprises to become more efficient and innovative versions of themselves.
Innovate or die is a theme supported by many managers. How can a small enterprise out-innovate or outsmart competitors without hiring a whole new team brimming with talent? The answer lies in strategically outsourcing key innovation needs to gain a sustainable leading position in the industry. Through outsourcing, enterprises have reduced innovation costs and risks significantly.
The ability to strategically manage outsourcing activities is a desirable trait required of managers. The manner in which managers balance internal and outsourcing process will determine the long-term success of the organization. Here are a few ways organizations can become efficient and grow faster:
1. Freeing up of human & financial resources
As organizations begin to grow, focus often shifts from core activities to other back-office operations. Many employees in small enterprises end up working in dual roles due to this. It’s important to free up these human and financial resources so that the organization can re-focus on the core activities that made them successful in the first place.
Outsourcing mundane yet important activities will help your organization become profitable without sacrificing on quality and professionalism.
2. Saving on material costs
Growth often comes at a price. Your organization may have to spend heavily on equipment or a new office as part of expansion plans. These costs are often prohibitive, eating into your organization’s profits. The cost-efficient way ahead is to retain your profits and allocate a fraction of your budget to an external agency that can serve as an extended arm of your business.
3. Saving on employee costs
There are several costs associated with hiring an employee, with some of these costs being obvious and some being not so straightforward. The expenditure begins during the hiring process because you can’t hire the right candidate without a dedicated HR team. You will also have to advertise on popular job boards such as Monster or Indeed to draw the right candidates. Most of these job boards offer monthly subscriptions that don’t come cheap.
Running background checks also add to the costs. Add to this the cost of IT equipment, training and dedicated desks. Finally, let’s not forget the core salary, taxes, pension benefits and bonuses. Your organization would have spent significantly to onboard just one employee. How much would it cost to simply outsource that role to an external agency? Probably a fraction of that cost.
4. Reducing risks and ensuring continuity
What happens when an employee falls sick? Or if a primary equipment fails suddenly? Worse, what happens if there is a power failure and an entire team stops working? There is a lot of downtime incurred in these scenarios. An outsourcing agency is geared to meet these challenges. It can ensure business continuity and reduce risks faced by your organization.
What should you outsource?
Any operation with rising costs is a candidate for outsourcing. Any department that has been poorly managed over the years can also do with an outsourcing strategy. An external agency often brings better skills to manage such functions than what can be achieved internally without significant restructuring.
At KServe, we are prepared to take on the most complex outsourcing challenges. All you have to do is get in touch with us and share your requirements. We will brainstorm with your team to arrive at an outsourcing strategy that can take your core business to greater heights!
