In recent decades, the outsourcing of key business functions has become commonplace across many sectors of commerce. Historically, outsourcing was often associated with business restructuring, especially in firms that were struggling to remain competitive in the marketplace. In these circumstances, a third-party company would analyze the various functions of a business and determine which teams could be dissolved and replaced with outsourced functions. This was almost exclusively done to lower costs and to ensure that the business could remain as a viable economic concern.
However, today outsourcing is undertaken in all types of business and is no longer an indication that the company is struggling financially. In this article, three key benefits of outsourcing some key business functions will be explored in detail.
Access to specialist teams
One of the main reasons that businesses choose to outsource their key corporate functions is so that they gain access to highly trained and knowledgeable teams. A prime example of this is when outsourcing of IT functions takes place. Selecting an effective IT service provider can allow a company to benefit from the latest IT expertise and can ensure that it utilizes the best mix of suitable IT solutions and infrastructure. This, in turn, allows a company to work to high levels of productivity and efficiency by leveraging the latest knowledge and technology.
A firm may not have its own dedicated team of IT experts who possess the latest knowledge and skills to implement large-scale IT improvements that can be rolled out across the organization. In addition, IT knowledge and expertise need to be built upon constantly; in-house IT teams may not have training in the latest IT techniques or may not be aware of how to maintain and troubleshoot the latest applications as effectively as a specialist external team of experts.
Lower staffing costs
In 2023, businesses seek to keep their costs low to enable them to remain competitive in an increasingly crowded global marketplace. It is important to consider that staffing costs can form a large part of any company’s expenditure. In addition, highly trained staff or those who are deemed to be experts in their field will commonly require high salaries in return for their continued employment. For example, a senior IT manager can expect to earn approximately $136K per year depending on their level of skills and knowledge.
A team that is comprised of senior and specialist staff can immediately lead to extremely high staffing costs for an organization. In many cases, it is better to outsource teams that require highly skilled staff as the overall costs are likely to be significantly lower than they would be if they were permanently employed in-house.
Allows for structured growth
As a brief final point, many businesses seek to outsource key teams or functions to allow them to achieve structured growth. As a business expands, it will expect to generate increased sales and revenue streams but will also need to take on more staff to facilitate the expansion.
As previously mentioned, employing in-house teams can be more costly than outsourcing specialist help. By keeping staffing costs low, the business needs to commit less capital to fuel its growth and can use external teams on a temporary basis to set up key systems or undertake time limited projects that aid business expansion.