The Importance of Outsourcing: An Overview

As a business model, outsourcing tasks to virtual assistants (VAs) permits a business to hire great talent abroad but at a massive discount. This business model has been used since the 1960s but became popular in the 1980s. As the gig economy grew and remote work became increasingly common, more companies recognized the benefits of outsourcing tasks to virtual assistants and freelance professionals.

Today, hiring virtual assistants and outsourcing work to remote workers is a widespread practice adopted by businesses globally, driven by cost efficiency, access to a global talent pool, and the flexibility to scale operations as needed. Moreover, the virtual assistants hired are consultants to the firm rather than employees. This relieves a company from paying additional fees generally associated with onsite staff. These costs include the salaries and benefits of the employee.

Also, in terms of the cost efficiency of hiring a virtual assistant, this includes the operational costs such as setting up a workstation, providing a laptop, and other stationary expenses. In many cases, businesses will use a business process outsourcing (BPO) provider as an outsourcing provider.

Importance Of Outsourcing Make This Mans Life Easier

What is BPO?

BPO stands for business process outsourcing − BPO is a particular form of outsourcing. With this type of outsourcing, the non-core tasks are handled by a third party or outsourcing company. This external partner can be based either in the same country or in a different country from the business.

The virtual assistant’s non-primary tasks cover back-office work such as data entry, personal services, customer services, research, or even more skilled tasks such as graphic design or software development.

The Advantages of Outsourcing in Transforming a Business

Outsourcing can be a game-changer for many businesses. Just look at Google. This company, worth over $2 trillion, has much of its success associated with outsourcing its business processes and several other functions to external providers. Yet, Google’s core work is conducted in-house. Moreover, the formula differs from traditional employment in terms of outsourcing staffing.

The workforce is typically located offshore and can be varied and, in some cases, multicultural; thus, they are referred to as remote staff members. When businesses outsource tasks, they gain a flexible, high-quality workforce that can be scaled to match the company’s needs. Additionally, the workflow is more precise and shorter. This all leads to increased efficiency. To illustrate outsourcing better. Just look at this example: 

Which is the Best example of Outsourcing?

One of the best examples of outsourcing is the practice adopted by many companies to delegate customer service operations to call centers located in countries with lower labor costs, such as the Philippines or even the new hot stop, South Africa. By outsourcing customer service functions, businesses can reduce operational expenses while providing quality customer support. This arrangement allows companies to access a skilled workforce at a lower cost, benefiting from the expertise and efficiency of workers in other regions. Additionally, outsourcing customer service enables companies to focus on their core competencies and strategic initiatives while entrusting non-core tasks to specialized service providers.

Importance Of Outsourcing

The Core Reasons for Outsourcing

Cost Savings 

Besides a flexible workforce, the main reason businesses outsource is lower cost savings they can benefit from. As Lee Kuan Yew, the former prime minister of Singapore, once remarked, “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.” Businesses will always seek ways of outperforming their competition, thus dominating the market.

Using outsourcing makes sense since it’s the most cost-effective staffing solution. The standard fees for hiring an onsite employee would demand taxation, compliance, legal and recruitment fees, office management, and healthcare benefits. However, depending on the country and business, this list can be more extensive.

More impressively, outsourcing is up to 70% less. Outsourcing is 70% cheaper and removes all of the complexities and costs of employment – legal, recruitment, compliance, taxation, healthcare, and office management – to name a few. Outsourcing offers a supremely flexible approach to employment.

  • Great peopleWhen a business outsources, it is not limited to hiring people they can afford locally. Most of these will not have the skills the company requires. But sourcing out means access to high-quality candidates. The only difference between them and a local candidate is location. More so, an outsourcing company will often handle the virtual assistants’ payroll and admin. These include screening candidates and doing regular check-ins.
  • The ability to scale with ease: Especially for startup companies that want to move fast, outsourcing allows them to onboard and offboard staff quickly. Besides the agile ability they gain, they can also take on projects that they would otherwise have had to decline due to capacity concerns. The result is more income and faster growth, particularly over and above the competitors.
  • Change your life and that of your team:  Companies can gain increased contracts, higher profits, faster growth, more time, and increased productivity. Virtual assistants can take over the arduous tasks so the onsite staff can focus on their core tasks. This means better use of resources since a VA can do the same repetitive tasks but at a lower cost. The onsite team will also have more time to spend with their loved ones, boosting their wellness. If you promote wellness, you will not only maintain these employees for longer, but they will also be more willing to work harder at the business.
  • The lives of virtual assistants will also boom: When you hire remote assistants to undertake tasks, you give them employment and a livelihood. You will help them upskill themselves, as they will work with an international company. This experience will be invaluable for their future career path. Also, although the online assistant salaries may appear low, once converted to their currency, the income will be high-paying local opportunities.

Man Working From A Coffee Shop

When is the Best Time to Outsource?

The best time is now. However, don’t be fooled − outsourcing is a complex system. Doing it yourself and sourcing a freelancer might be one way, but you will find it wrong. Usually, businesses tend to give up on outsourcing because, in many cases, managers cannot delegate and manage people well.

Also, not understanding the complexities can lead to minor errors, which makes the process uncomfortable for onsite staff members. Such conflict can lead to other fallouts.

Think About Outsourcing; Think Aristo Sourcing.

The best and easiest way of approaching outsourcing is to use an outsourcing agency. Using a trusted, well-run agency can save time and hassles and improve life for all. Selecting an outsourcing company to collaborate with can be difficult, especially since there are so many to choose from.

Not to be too self-congratulatory, Aristo Sourcing is a leader in the BPO industry. Starting in 2014, the company gained the majority of new clients from recommendations alone. That is a remarkable position as it means the clients are pleased with the company’s performance and service.

Your Next Step

Reach out to Aristo Sourcing. Let our outsourcing expert assist you and advise you on your unique requirements. The team will then source a remote assistant to match your needs. To learn more about our process, visit our ‘how it works’ page. Alternatively, book your call now.  

Frequently Asked Questions 

Why do companies outsource?

Companies outsource to reduce costs, access specialized skills, improve efficiency, focus on core competencies, and gain flexibility in staffing and resources.

What are the benefits of outsourcing?

Benefits include cost savings, access to global talent, scalability, increased efficiency, flexibility, and the ability to focus on core business functions.

What are the risks or challenges associated with outsourcing?

Risks include loss of control, quality concerns, communication barriers, data security risks, cultural differences, and dependency on external providers.

What types of tasks or services can be outsourced?

Tasks such as customer service, IT support, software development, administrative tasks, manufacturing, accounting, and marketing are commonly outsourced.

What are the key factors to consider when outsourcing?

Key factors to consider include the nature of the task or service, cost-benefit analysis, risks and rewards, cultural alignment, legal and regulatory compliance, and the stability of the outsourcing provider.

How does outsourcing impact job opportunities locally?

Outsourcing can lead to job displacement in local markets but may also create new job opportunities through increased specialization, innovation, and economic growth.

What are the trends in outsourcing, and how is it evolving?

Trends include increased adoption of cloud computing, automation, and robotic process automation (RPA), as well as a shift towards nearshoring and reshoring to mitigate risks and improve collaboration.

What are some successful examples of outsourcing in various industries?

Examples include IT outsourcing by technology companies, call center outsourcing in telecommunications and banking sectors, manufacturing outsourcing in the automotive industry, and business process outsourcing (BPO) in healthcare and finance.

The Ultimate Outsourcing Guide:

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