Why Do Businesses Use Outsourcing Services
- 10 Jan 2020
Many tech companies, for example, outsource their IT support services. Instead of creating a separate department to handle customer care, they use third-party support services. This setup is done for compelling reasons as discussed below.
Arguably, the leading reason why businesses use outsourced services is cost reduction. Companies can lower their operating expenses by not having an in-house team for specific functions like customer support. Some aspects of businesses can be competently handled by external entities that have the right people and tools for the job. Why should a company spend on the purchase of new equipment and the training of additional employees if there’s a cheaper alternative?
Buying new hardware (as well as the software to run the hardware) can be a costly capital expenditure. Not many companies can afford it. Moreover, operating the equipment entails several additional costs. These include the electric bill, internet connection, the system to regulate the temperature or ventilation of the equipment, maintenance, and depreciation expense. The space the equipment occupies can also be regarded as a cost.
The point here is not to assert that spending on equipment and personnel is not a good idea. In some cases, it makes sense to invest in having an in-house team for a specific purpose. However, in most cases, it’s better to resort to outsourcing primarily because of the cost considerations. Many companies outsource certain tasks because they don’t have the right people, resources, and expertise for it. Instead of starting from scratch, businesses acknowledge that outsourced solutions may present a better setup and improved outcomes.
Established expertise and experience
Aside from the financial advantage of using outsourcing services, there’s also the benefit of not having to expedite and invest heavily in training to achieve the desired level of expertise. The crafting of marketing strategies, for example, is not something that should be entrusted to newbies. However, what if nobody in the current roster of employees has the qualifications and relevant wealth of experience to get the job done efficiently?
Outsourcing or managed service companies have competent people, equipment, and technologies to get the job done efficiently. They have accumulated several years of experience for them to instinctively respond to emerging challenges or difficulties. They don’t have to start at the lowest skill levels. They are equipped with the know-how and tools to deliver quality output.
Outsourcing and managed services are not only for big businesses. Even smaller ones can leverage the setup to compensate for their deficiencies in certain aspects. The two most compelling advantages of which are efficiency and the availability of expert and experienced workers to perform tasks with ease and the desired results.