Reasons Behind The Popularity of Outsourcing Service

It’s been labelled one of the biggest business trends of 2016/17 and shows no signs of slowing: Outsourcing in-house tasks to specialised third-party providers has become such an integral part of business in Australia that it can no longer be ignored as an option for enterprises wishing to expand. Once thought to be a strategy only available to big business, even SMEs are now using business process outsourcing as a vehicle for growth. Some even consider it to be a necessity. So why all the fuss?

Outsourcing is meeting the demand for flexibility and agility in response to the increasingly competitive market, uncertain financial conditions and rising employment costs. Traditional methods are simply not meeting the challenges of modern business in Australia.

If you have not yet joined the business process outsourcing movement, perhaps you should know why outsourcing has become so popular with businesses today.


Outsourcing – why so popular?

It saves time and money

One reason outsourcing gained such popularity with Australian businesses was it’s time and cost saving advantages. Many businesses were looking for ways to cut costs in light of the GFC and increasing stiff competition. Outsourcing has the capacity to reduce operational and labour costs, delivering significant savings and improving operational efficiency.

It enables a business to focus on what it’s good at

Figures published by the American Psychological Association indicate that multitasking, or attempting to manage multiple projects at once, results in:

  • up to a 40 per cent drop in productivity
  • longer completion rates; and
  • overall increased stress levels.

True to these statistics, many businesses are realising that freeing employees of distractions and non-core activities so that they can focus on what they are good at, delivers major benefits in terms of productivity and employee satisfaction. Conversely, retaining trained professionals to carry out administrative tasks in place of an ‘admin all-rounder’ can achieve superior results in less time. Increasing numbers of SMEs are experiencing the benefits of outsourcing administrative tasks such as HR, payroll, debt collection and tax related accounting functions. The benefits of having a debt collection service on demand in particular, has shown to have many advantages to businesses; with improvements in cash flow gained by quicker turnarounds for accounts receivable and efficiency gains with the better allocation of internal resources – it’s unlikely that the receptionist will have the same level of debt collection skills and ability to get results as a firm that specialises in the field.


Why outsourcing services is so popular for businesses today


It improves access to a variety of skills

Small businesses often lose out on the skilled talent they need because they simply don’t have the resources to acquire it. Outsourcing provides access to workers with highly specialised skills without the commitment or price tag of having to retain them on a permanent basis. It also means you don’t have to bear the legal and financial risk of an untrained amateur mishandling an administrative task.  Gaining access to a skilled workforce when required can give a business the resources to grow quickly.

It can scale up and down to meet needs

Business fluctuates and as it does, so too does the administrative load. Having to bring on new staff to accommodate more work is a slow and cumbersome response to such changes. Outsourcing, on the other hand, enables businesses immediate access to any number of skilled workers without the commitment, as and when extra hands or skills are required.

It can improve efficiency and morale in the workplace

Farming out unsavoury, time-consuming and ‘out of control’ departments to a specialist third party can remove physical and mental burdens and clutter from the workplace. Entrusting such business processes to an external specialist eliminates key causes of stress and frustration for employees and contributes to the overall efficiency and morale of the workplace. It also ensures that these tasks are given the care and attention they require to ensure your business stays on top of its regulatory requirements.

At the end of the day, the question is not whether your business needs to outsource, but what functions you should outsource first. Every business no matter its size can utilise outsourcing as a means to cut costs, heighten efficiency and expand. The key is outsourcing the right tasks and finding the right service providers to partner with.

About the Author: Idea Express

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