Globalization has led to competition not being limited to a region or country; businesses are now forced to compete on a global scale. The implication is that companies must promote their products or services most effectively by focusing on their core business.
This will reduce operating costs and speed up the product or service supply to the market while keeping customer costs as low as possible. One approach includes outsourcing strategies, eliminating non-essential business, and relegating these activities to an external party.
Defining Globalization
The Council of Europe defines globalization as: ‘… the ever closer economic integration of all the countries of the world resulting from the liberalization and consequent increase in both the volume and the variety of international trade in goods and services, the falling cost of transport, the growing intensity of the international penetration of capital, the immense growth in the global labor force, and the accelerated worldwide diffusion of technology, particularly communications.’ [Source: Globalization patterns in EU trade and investment.]
Benefits of Successful Outsourcing Examples
Over the years, international corporations such as Apple, IBM, Google, Unilever, and Microsoft have used outsourcing as a business strategy to remain competitive while growing their businesses.
Outsourcing strategies can offer advantages such as adding value while tapping into a particular resource base or even ameliorating risks. Moreover, outsourcing can mean reducing costs, boosting efficiency, augmenting the ability to focus on core functions, saving on infrastructure and technology, and gaining access to adequate resources.
Avoid Any Latent Risks in Benefiting from Outsourcing
Large businesses have long been using outsourcing as a strategic mechanism to add benefits to their business. Some risks and concerns should be noted.
These are legal matters, security, hidden costs, financial troubles, and continuity risks. However, there are ways of minimizing your risks; such advice is given in this article.
Understand Your Unique Needs
Before applying outsourcing strategies, consider the functions of services you want to outsource. You must be clear and concise about your business needs, benchmarks, policies, and long-term objectives.
Also, understand that outsourcing is, in fact, a long-term management strategy. Outsourcing aims to reduce business costs and enhance business services over time.
Effective Outsourcing Requires the Right People and Agency
It would help if you had the right people and the most professional outsourcing agency. To gain outsourcing partners to add value, you need mechanisms in place, such as reporting mechanisms and ongoing enhancements, to ensure continued progress. Hiring great talent is also fundamental. Outsourcing companies can gain access to highly skilled people and thus are not limited to local candidates. However, sourcing such talent can be daunting for the business owner or manager.
Yet, with the right outsourcing partner, this process can be smooth. Naturally, quality should never be a variable. Going cheap might seem the best option at first glance. However, choosing cheap over quality may have negative consequences for your business.
It is wise to select an outsourcing partner rather than a freelance contractor. The outsourcing company should come with professional references and be highly recommended by your peers.
Strategically Utilize Your Outsourcing Assets
You must return to basics using outsourcing strategies, such as strategically applying your resources to gain a good outsourcing partnership. Also, outsourcing is there to enhance the value of the core tasks of your business − outsourcing cannot simply become a replacement.
Not all tasks should be outsourced. Consider the first point − your company’s needs and goals. It would help if you considered outsourcing repetitive tasks that cannot be automated. Doing so will enhance your core team’s work, giving them the support they require to do their work well.
Ongoing Improvement
With outsourcing, various fears and uncertainties can surface, leading to confusion. The business must manage the risks to ensure the outsourcing strategies work well. This will demand proper communication between the virtual assistants and the outsourcing agency.
The agency should also communicate well with its virtual assistants. Moreover, throughout the process, there should be ongoing enhancements in reviewing whether the goals are being met, whether any problems and complications are arising, and how to adjust the outsourcing strategies to overcome these issues.
The Bottom Line: The Fundamental Elements of Outsourcing Strategies that Work
Outsourcing, notwithstanding, offers many benefits. These apply to any business, regardless of size, and more so to keep eCommerce businesses such as Amazon’s online businesses competitive. As a strategic approach, outsourcing can increase the company’s effectiveness.
However, a business must consider the above points to ensure that the outsourcing strategies are practical and achieve maximum benefits while mitigating possible risks.