Outsourcing has been a tried and tested strategy. It has helped many businesses navigate times of economic turbulence and maintain profitability. In fact businesses even report an increase in productivity. A 2014 study by Stanford University showed that outsourcing increased productivity by 13.5% on average. But when is the best time to outsource?
In times of business uncertainty, businesses tend to re-align their resources. This means they are transitioning to more efficient business modeling by streamlining costs.
For businesses that are outsourcing for the first time, they will initially outsource non-essential tasks to reduce the risk while developing their learning curve about the strategy.
They will recognize immediately the improvement in operating expenses as the biggest comparative cost advantage in outsourcing lies with labor. Businesses should be able to streamline costs by 40%.
By outsourcing non-essential tasks, businesses will be able to improve productivity. They can shift their focus on functions that translate to income for the company. This is a key benefit when business prospects continue to remain sluggish.
The cost savings generated from outsourcing can also be used to fund new projects and departments. If you are planning to maintain market visibility, you can use the cost savings for marketing and promotional activities.
Outsourcing also allows you to scale business even though prospects may seem dim and the investment climate appears risky. In the first place, you have already generated cost benefits which will provide a buffer versus financial risks.
Second, by outsourcing your non-essential and technical tasks, you can shift your focus to new growth industries and diversify your business to less risky propositions.
Remember, opportunities abound during times of chaos and turbulence. No one wants to explore markets because of greater risk. But that is when you have the best choices at the most affordable prices.
Build New Markets
You should also consider outsourcing if you plan to build new markets for your business. There are a number of ways you can do this:
- Outsource Telemarketing Services – By delegating telemarketing services to virtual assistants or other third party service providers, you can reach out to new potential regions of customers. Many of these service providers are paid on a performance- based arrangement which means they have to hit certain quotas.
- Outsource Digital Marketing Services – The key for your sales people to be effective is to have access to high quality leads. This responsibility falls on the shoulders of the digital marketer who will use his or her experience to design an effective online marketing campaign for your business.
Outsourcing is an effective way to build your business whether in time of prosperity or unpredictability. But its benefits shine brightest when the business environment becomes volatile.
Proof of this is the 132% growth of the global outsourcing market since the new millennium which had been punctuated with history changing events. There is an inverse relationship between the growth of the outsourcing market and the world economy.
The new millennium ushered in the age of the new economy; one that is very much ambiguous. Thus, the best time to outsource is now.