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Benjamin Franklin once said that “If you fail to plan, you are planning to fail”. This can be applied to your company’s long-term business plans and outsourcing decisions. For small businesses, it is common to experiment with a number of strategies, but after a few trials and some consequential errors, you should be able to come up with a long-term plan for the company. Thus, these long-term plans become pre-requisites to business decisions, including options to outsource.
Failure to establish these plans lead small business owners to thinking that outsourcing is more of a liability. They end up misplacing specific outsourcing solutions to the wrong business function or department. This could all be avoided with the guidance of a long-term business development plan which could assist in:
Massive Open Online Courses, also known as MOOCs, are currently taking corporate training by storm. Small to large enterprises worldwide are quickly turning to these ready-made short online courses to educate their employees about a particular skill, software, industry, or a project. Most short courses are free but others are being offered as premium but usually at a minimal cost. Accessibility is also one of its key highlights as employees can take their courses based on their own schedules. Videos, games, live chats, and other forms of collaboration are what’s being utilised to deliver content and to assess the employee’s grasp of the subject matter.
Most of my initial meetings with clients yield very interesting questions about outsourcing but this does not surprise me at all. Some managers that I get to talk to still see outsourcing as a threat to this day, rather than an opportunity that could possibly fuel faster growth for their people and for their entire firm.
RTOs are no different. I have noticed that whenever I start discussing about “outsourcing”, RTO CEOs and even their managers instantly jump into the old picture of how call centres were before – rows and rows of people who are constantly making calls to offer products or services to consumers abroad. Outsourcing have evolved into a very complex business practice and people are no longer confined to just making phone calls. There are a lot of capabilities that are now being outsourced and the possibilities are just endless as outsourcing continues to grow. Technology and the availability of highly skilled professionals are paving the way for this growth.
A number of start-up companies have suffered productivity due to sacrificing important business functions for the sake of following compliance during tax season. Daily operations come to a halt as the staff spends more time trying to keep the company to survive an audit.
According to Yahoo Small Business, there are several advantages of outsourcing bookkeeping operations:
Many clients that I speak to are quite surprised when I suggest that you can outsource your sales and marketing division. Their replies are usually “No that wouldn’t work our sales people need to communicate face to face to define and address the needs of our clients” and I couldn’t agree more, but let’s look at the logistics of a sales role. Now this obviously depends on the product or service that you are selling but let’s say a new Business Development Manager in a 360 degree role makes 20 to 30 calls a day and arranges maybe 8 to 10 appointments for the following week.
At this point, there is a love-hate relationship about outsourcing among entrepreneurs, but to small companies who have adopted it, it has been an integral part of their operations. If done right, it can become one of the keys to long-term business success giving you the following:
Bigger savings and faster ROI
The main reason why companies outsource especially for small businesses. It is only given that for startups, the cashflow initially goes out and ROI or return-of-investment might take a while. If however, outsourcing is adopted it may speed up the ROI given that with a much lower cost, one can get the same quality of work. The savings can also be used as capital for another business function allowing the company to expand.
The concept of outsourcing has been around since the 1970s, back when many Western manufacturing companies realised the need to consign less-than-essential work or tasks that external groups specialised in. But it was really in the early 2000s that outsourcing started gaining traction as a mainstream business industry. Most of the outsourced jobs were in IT and large multinational corporations took the lead to go east to look for fresh, capable and more affordable manpower to do projects for them.
What is a cost centre?
A cost centre is defined as a department within a company that does not generate direct income but adds to the total cost of running the entire business. The term “cost centre” is usually attached to departments like marketing, IT, human resources or accounting. They need funding to exercise and implement their group functions and projects. However, there is no direct income that can be attributed to them.
Companies now are at a cross-road where setups of cost centres are being reviewed and redefined. Many are actually looking into the direction of outsourcing to counter their expenses at home and then hopefully, realise savings through lower labour and operating costs abroad. While this fact is generally true, there is still a lot more to outsourcing that could further contribute to your over-all revenue efforts.
The number of outsourcing business solution providers has increased over the past ten years. With this becoming a global stream, numerous companies have invested in offshoring to cut the costs of business operations. Coupled with fast paced of technology, more services have become virtually available for companies. Small businesses have emerged with outsourcing as their operational resources. The most popular jobs to outsource include the following:
1. Customer Service Representatives
This job is one of the pioneers that led to the growth of outsourcing. Comparing the rates of local employees to those in other countries, large companies have seen the potential of greatly lowering the costs. With the proper accent and culture training, this could give businesses more available to addressing customer concerns quickly.
As there are two sides of the same coin, outsourcing has its advantages and disadvantages. While the benefit of getting quality service at a lower cost is highlighted, there are emerging issues that makes business owners think that they might be at a loss if they gear towards outsourcing.
The way to maximising Return of Investment (ROI) in outsourcing is by identifying those risks initially and targeting a solution for each. Here is how to address outsourcing issues to maximize the service value: