Outsourcing was originally a move to cut labour costs, today it is opening up a lot of possibilities for businesses. Many companies that decided to invest big in outsourcing got more than just savings. Their contract with providers allowed them to grow and get ahead of their competitors. Thinking about BPO contracts? Consider these perks – you might consider signing an offshore contract very soon.
Establish a beachhead in an emerging local market
Outsourcing can be part of an expansion strategy in an emerging market, possibly on the other side of the world. AstraZeneca for example used their BPO investments in China to establish a beachhead in the country’s fast-growing pharmaceutical market. Their offshoring plan was laid out for years zeroing in on sales and manufacturing services. This move was intentionally pursued through partnerships with local organisations. The result: AstraZeneca was there to cash in as the Chinese pharmaceutical industry boomed.
Act on hard-to-fill talent needs
Lack of talent can easily hamper the growth of a business. You might see increasing demand for your business but without the human capital to make it all happen you are dead in the water. But what your local labour market lacks might have an alternative in other territories. Outsourcing can easily fill up a key position and get the company running. Texas Instruments has an R&D base in India and this gave them an upper hand in innovation. This move even resulted to multiple US patents for the company. Imagine what your company can achieve by simply leveraging talents from other places.
Embrace value, reduce the risks
BPO has its risks, one of which is quality assurance. But there is also no denying that outsourcing can provide a lot of value for businesses. The secret therefore lies in the management of risks and maximisation of value. Hasbro outsourced its manufacturing in China but it did not succumb to the lead paint controversy way back in 2007 because they carefully managed their contracts. They made sure their quality standards were met. They involved themselves intimately in their manufacturing partner’s processes. The result? They saved on labour while also ensuring quality. Risks can’t be eradicated 100% but things can be done to limit it and procedures can be set to make sure lapses will not happen again.
Usher in innovation
The fast-changing needs of the market demands faster innovation from businesses. The faster you improve your offering the higher your chances of beating your competitors. Outsourcing provides for innovation. Procter and Gamble is collaborating with outsourced talents and this has improved their productivity by over 50%. How this translates to their bottom line? $10 billion in profits for hundreds of new products.
It does not matter if you want to start small, you just have to be clear with your objectives for outsourcing. Do you see good opportunities in a specific territory? Are you having a hard time looking for talent? Are you trying to expand your marketing team for a new product line? Whatever your needs are, outsourcing can be a strategic option for you. Saving on labour costs is just an advantageous consequence.
