Why do companies outsource?

Many small to medium-sized businesses, especially in emerging markets, are outsourcing non-core roles to professional services firms. By relying on a specialist company that has the resources and proficiency, it allows the business owner to concentrate on their primary business areas. We look at four ways a company can benefit from outsourcing.

1. COST-EFFECTIVE

A company can cut costs by outsourcing, for example, IT-related tasks. The service provider will have their own equipment and highly skilled staff, and they will be responsible for the daily running of the operation, and any maintenance and troubleshooting issues that arise. When you outsource you are also only spend money on getting a single task done, which saves you on costs and manpower.

2. COMPETITIVE EDGE

As a smaller company you often can’t compete with larger organisations that have greater resources. With outsourcing, however, you have access to the same expertise as larger businesses, and this allows you to build a team of skilled professionals without having to actually hire these expert employees full time. Your association with a prominent service provider can also improve your credibility.

3. INCREASE PRODUCTIVITY

When you can outsource daily tasks, it frees up your employees to focus their time on more essential jobs. You are also not spending resources hiring, training and educating new staff members. With the additional assistance you get from outsourcing, you can run projects concurrently, which boosts your productivity.

4. SPECIALIST DIVISIONS

With outsourcing, smaller companies now have access to world-class IT technology, resources, and an experienced workforce. Additionally, valuable skills, expertise and services that may not be readily available locally, can be accessed by outsourcing.

There are some business owners who are not willing to outsource as they fear losing control of key processes, but the reality is that it makes good business sense. When you outsource non-core areas it frees up valuable time to focus your attention on essential areas that grow your business.

It’s important that you evaluate your competencies and capabilities before you make your decision, and you don’t pick a task to outsource simply because you don’t want to do it. If the job is important to your core business, the responsibility for it should sit with you.

Interested in outsourcing? LEAP provides business support to SMEs, and our service connects you with a network of experts across a broad range of disciplines, including technology, marketing, sales, business management, operations, human resources, legal matters and more. To see how we can assist you, call LEAP today on 011 449 7974 or visit www.leapco.co.za.

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