By: Paul Wilson
An invaluable tool to business growth is outsourcing. It can be used strategically to influence corporate growth and financial stability.
The key is to outsource work which is non-essential or areas where the company lacks expertise. This frees valuable resources which can focus on areas of competitive advantage.
Growth can be enumerated in many ways not just in costs saved.
When you outsource a specific project you save on time and resources spent on training required to complete the project successfully. You can harness the talent, technology, and expertise of niche providers. By outsourcing, you can appoint a consultant or company who has core competencies in the field and can complete the project within the given time. The company saves on hiring permanent employees, training, benefit payments, hidden costs, absenteeism, requirements of workspace, and equipment.
The company focuses on core aspects and transfers the nitty-gritty of non core aspects to outsourced companies. This just means fast and efficient turnover as well as a competitive edge.
Outsourcing is a way to maximize workforce flexibility without the added burdens of permanent financial commitments. One uses highly qualified consultants who can complete a particular project in no time at all.
Time is money and by outsourcing a company saves valuable time which can be channeled productively, leading to growth.
Capital is used efficiently without unnecessary wastage in overheads, office space, technology, and training. Outsourcing spurs growth by providing skilled manpower and increased productivity at lower costs. If the outsourcing is selected intelligently, it leads to tax breaks saving the company thousands of dollars.
Further, business risk is shared by the outsourcing company which will know how to minimize or avoid risk in their area of expertise.
The business world is moving at a fast pace and companies need to provide quick service and low rates. Outsourcing allows a firm to do just this, provides the most advanced technology, efficient service, and low rates.
A company can, by outsourcing certain sectors provide in house support which will not be otherwise possible without expansion. So, one can gain economies of scale, efficiency as well as expanded expertise.
To summarize, growth of a company when outsourcing is adopted can be evinced in:
- Cash flow.
- Emphasis on core competencies and long term value creation.
- Minimization of risks by reliance on experts.
- Using external talent and technologies when essential and keeping overheads small and manageable.
- Infrastructure of large firms without associated burdens of large offices, greater number of permanent employees, and hidden costs of maintenance.
- Improved process and project deliveries.
- Service improvements.
- Technology infusion.
- Little or no capital investments.
- Better project costing.
- Asset conversion.
In the modern world outsourcing is an intelligent way of handling a growing business poised for success in every field.