Once referred to as time-sharing, outsourcing is quickly becoming the method of choice for companies that want to reduce costs and improve their service and operations capabilities.
Outsourcing is simply the function of taking internal resources and giving them to outside firms who then make those work operations their sole responsibility. In the process, companies can save a tremendous amount of money over full-time departments. So, what are the top five outsourcing options for businesses?
Payroll outsourcing is probably the most common function companies look to save money on. According to some estimates, up to 50% of small businesses pay a penalty for late or incorrect filings with the IRS.
Outsourcing payroll firms take this responsibility on themselves and will not only take care of properly filling taxes, but will likely reimburse companies if they are fined. These firms are experts in tax laws, government regulations, and up-to-date in the latest human resources management. They can provide direct deposits for employees and manage the entire payroll for the company.
2. Outsourcing Marketing and Sales
Marketing is perhaps the single most important aspect of a company’s success. Marketing is everything a business does, rolled into one cohesive, precise, and informative message to market. When it comes to increasing a company’s market share, increasing sales leads, and growing altogether, companies use outsourced marketing firms to drive down costs and increase market presence. These firms can not only help in marketing but also provide up-to-date reporting on the costs of finding new customers.
Learn about the differences between inbound and outbound marketing.
3. Outsourcing IT
When it comes to Information Technology, outsourcing IT firms are ideally suited to managing the company’s entire infrastructure. In addition, most firms provide 24/7 support and remote desktop management where employees and customers can have immediate access to support. When companies want to be perceived as being bigger than they are, nothing is more impactful than the benefits afforded from having round-the-clock customer service support at a fraction of the cost of a full-time department.
4. Outsourcing Manufacturing
For companies looking to reduce their manufacturing cycle times and increase their production throughput, nothing compares to outsourced manufacturing. Typically the kinds of businesses that benefit from outsourced manufacturing control design and engineering and provide outlines and bill of materials instructions to the outsourcing manufacturer.
Outsourced manufacturing firms - sometimes referred to as subcontractors - will manage the entire manufacturing process, including quality and batch control. It is in their best interests to produce the parts on time and within budget so you don't have to.
The above video outlines some simple lean work cell designs.
5. Outsourcing Accounting & Finance
For businesses that need help in accounting and finance, there are a myriad of options and companies to choose from who can provide the right accounting management practices. Having a clear and concise balance sheet is essential in determining current cash reserves and available financing. These firms can not only help in accounting but are experts in cost-based and cash flow management.
Some other benefits and functions can be outsourced including using third-party warehouses, product and project management, as well as design and engineering. Outsourcing allows companies to reduce day-to-day operational costs while improving their service capabilities.
It is also an excellent way to reduce the costs of upward mobility within the company. Employees with seniority demand more money and companies typically don’t want to lose important talent. The choice is paying more or letting them leave with all that knowledge. Outsourcing allows companies to avoid these costs altogether.
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