How Can You Save Money With Offshore Outsourcing?
Investing wisely and saving whenever possible are two ways to manage your money. All companies, from startups to multinationals, plan their finances correctly, which makes a big difference. Because it gives them access to better talent at a much lower cost, most businesses prefer to outsource to other countries.
The software development industry is one of the most heavily offshored sectors. Many countries, including India, Ukraine, Indonesia, Poland, and others, provide offshore services to clients worldwide. Selecting an offshore outsourcing company would provide you with a team of exceptional quality, affordable rates, and the capacity to save time.
So how exactly does outsourcing save you money? We will look at how offshore outsourcing can help reduce your company’s costs.
How Does Outsourcing Save Money?
You can save significant amounts of money with outsourcing, but choosing the right partners is essential or could backfire. Read about the ways to save money to help you decide what course of action to take.
- Less Payroll for Employees
- Requires Less Workspace
- Lower Costs for Equipment and Utilities
1. Less Payroll for Employees
Even if there isn’t much work to be done now, employers are still required to pay their employees. Payroll taxes and employee benefits like health insurance, travel reimbursement, and pension plans are additional costs you must pay.
- However, it can be a risky investment to hire staff for inbound and outbound teams.
- Even after you’ve spent money on their hiring and training, they might decide to leave the company at any time.
- Additionally, you would have to spend more money hiring a replacement once an employee leaves.
However, if you outsource, you will only be responsible for paying the cost of the selected service package, which already includes the salaries and training of the agents. Employee benefits and taxes are not a concern.
2. Requires Less Workspace
The need for a larger workspace frequently arises when you hire more employees. To do this, you might have to spend time and money renovating your current office space, renting a new one, or building a brand-new commercial space. You can get around this issue by hiring a third-party support team with their own workspace.
3. Lower Costs for Equipment and Utilities
Offshore outsourcing will help you lower the costs of the equipment and other utilities. The following tools are required for the customer support or outbound marketing team to perform their duties:
- Laptops or desktop computers
- Microphones and Headsets
- Voice Over Internet Protocol (VOIP)
- Software for Automated Dialing
- Software for Call Recording
- Software for Automatic Call Distribution
These tools must be available to your in-house team if you intend to use one. You may also need to expand the IT infrastructure of your business to make room for them by purchasing more servers and creating a larger space to house them.
The cost of running your business will increase due to the additional equipment and increased energy consumption. Fortunately, you can outsource it rather than incur such a high investment cost. The outsourcing company will provide the equipment for the support teams.
Why do Companies Support Offshore Outsourcing?
Now, it is obvious how offshore outsourcing lowers costs. Many businesses advocate for outsourcing software development projects. The majority of them prefer doing so for the following reasons.
- Outsourcing is frequently less expensive and can free up resources for other aspects of the business compared to hiring numerous employees and investing in expensive equipment. It can also produce a new business partner.
- Many businesses outsource particular tasks to cut costs. Additionally, outsourcing enables businesses to scale up or down based on their size and future expansion plans.
- Payroll costs can be decreased through outsourcing and by eliminating the need for employees.
- Businesses can broaden their reach with the aid of outsourcing.
- Companies with a global workforce can expand into new markets and gain international recognition.
- They can also lower their startup costs by contracting out specific jobs.
- By outsourcing, businesses can invest in more profitable parts of their operations while cutting costs in less promising ones.
- Liability can be decreased through outsourcing.
- This adaptability can help businesses make strategic business decisions like mergers and acquisitions.
- Increased agility and strategic growth are made possible by outsourcing.
- By utilizing third-party services, businesses can respond quickly to new client demands and shifting market conditions.
- Companies can adjust resources up and down by need when they have an underlying flexible model, lowering the risk of losing clients.
- Outsourcing enables companies to capitalize on service provider investments and quicken step-change capabilities.
How Much Money Does Outsourcing Save Companies?
The amount you can save is flexible. The International Organization for Standardization (ISO) estimates that outsourcing can help businesses cut costs by 15% on average. However, the savings will vary depending on how many business operations you intend to outsource and other internal changes you wish to make.
According to the Harvard Business Review, you could reduce costs by 20% to 30% by outsourcing non-core business processes like:
- Payments and Billing
- Payrolls
- Recruitment
- Lead generation
Although outsourcing is only sometimes the most affordable option, you can still save money if you do it correctly and with the right service provider. Gather the prices from the various service providers, compare them to the knowledge and skills they offer, and base your decision on them. So make use of the offshore outsourcing possibilities to reduce unnecessary costs and save money for your plans for the company.
