Outsourced Service Provider: Is Outsourcing Truly a Business Solution?

The duty of the outsourced service provider has almost become a do-without in the present business world. In addition to helping companies and businesses focus on the aspects that promote the essence of its existence, businesses are also leveraging outsourcing increasingly to reduce operational cost and gain increased access to cheaper expertise.

However, some schools of thoughts are of the opinion that outsourcing is contributing to job scarcity in the countries that are depending largely on outsourcing. Others say that companies may lose quality control by leveraging outsourcing.

But, with all these deliberations, criticisms and contrary opinions, have you wondered why outsourcing is waxing stronger as a major tool for business solution? Should you really outsource or hire full-time staff for all your business processes?

Why You Should Outsource

Regardless of the contrary opinions and concerns about using an outsourced service provider, outsourcing concept is spreading like wildfire in today’s business arena. Virtually all types of businesses are outsourcing various tasks and operations for the following top 3 reasons;

1: Cost Reduction

Cutting down overhead costs by outsourcing is like a gold-mine for companies and businesses. Hiring employees at a reduced rate and outside of the business premises allows both small and large businesses to plough back additional profits and excess resources into expanding the business.

Also, lower operational costs have the potential to draw and retain investors. This is because investors are willing to invest in businesses that have potential for increased profitability as a result of reduced operational costs.

2: Finances and Risk Reduction

Also, when a business hires an outsourced service provider, this comes with finances and risk reduction benefit. Outsourcing could be a way out of financial obligations such as the confines of tax regulations, especially in countries like U.S. where tax burden can be overwhelming.

Furthermore, when a company hires subcontractors to handle its operations, it spreads the risks that come with business, including insurance liability.

3: Increased Competitive Advantage

Since companies are able to achieve increased production efficiency and cost saving through outsourcing, it can enjoy increased competitive advantage. A typical example is pricing the product lower and attracting more customers than its competitors without losing out on quality profit. In fact, a company can substantially corner the market to itself by leveraging outsourcing power.

Another competitive advantage is the ability to push the product or service to the market faster than competitors who are handling all of their production and administrative processes in-house. Obviously, it’s smart and wise decision to hire an outsourced service provider in running a business. The benefits far outweigh any disadvantage or concern that may be.

And, even the concerns such as quality control can be resolved by employing professional technique in hiring a provider. And, it’s also helpful to draw proper contract that binds both parties to outsourcing partnership.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

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