Delegating (process of transferring credentials or part credentials) of some functions to other companies, on one hand, helps to cut costs, on the other hand, to concentrate on developing main lines of activity. In addition, this is an additional way to attract external resources — knowledge, experience, to involve fresh staff without excessive obligations and risks.
There are many reasons why the head of the company should think about outsourcing. Firstly, you save money. This can be considered a separate excellent bonus. Transfer of certain functions of the company to outsourcing (accounting services, IT, PR and marketing, call center) will help to reduce operating costs and increase profits. Thus, you transfer fixed costs to variables and become more flexible, which means more competitive. Also, delegation of some functions saves time and gives opportunity to advance. When it comes to small and medium-sized businesses, outsourcing helps to focus on key areas of activity and more rationally spend human and financial resources on performing administrative and operational tasks. You get access to quality, «sharpened» for certain processes and functions and at the same time relatively inexpensive personnel.
In addition, it improves the quality of tasks. A pleasant addition will be the fact that working with a world-class provider gives access to external resources in other markets. You will establish useful connections, attract human capital and knowledge, as well as financial resources. Transfer of tasks can reduce the company’s dependence on individual employees.
For outsourcing companies, their occupation is business, not profession. To remain competitive, they will monitor the quality of provided services. It is difficult to achieve such approach to work from hired employees.
Outsourcing certain areas also reduces the burden on management. The less tasks are performed inside the company, the less control is needed to supervise and the better managers can concentrate on developing main business areas. Thus, the costs (the cost of management time of the company, the lost profits) are reduced. And, of course psychological tension decreases, which will certainly affect safely on all employees. Operational risks are also decreasing.
Giving some functions to outsourcing, all you can do is to monitor the contractor in terms of performance of the contract. Also, outsourcing helps companies maintain their compactness. It is very useful if you do not want to keep a large staff and create a complex corporate structure. You can also use outsourcing for business reorganization and optimization of operating expenses. Some companies use delegation of functions to improve access to foreign markets. The closer production is to market, the better.
Companies choose outsourcing directions depending on needs and financial possibilities. Someone gives out only two or three functions, for someone it’s easier to keep staff of ten employees and at the same time to outsource maximum amount of work.. However, the goal is the same — to increase flexibility of its business model and reduce operating costs. Outsourcing is now actively gaining popularity, as many companies have already seen the effectiveness of this method.