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How Does Outsourcing Helps Save Time and Money? "It's estimated that 3,00,000 positions are outsourced annually in the US"

By Baishali Mukherjee

Opinions expressed by Entrepreneur contributors are their own.

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Owners of a small or medium-sized business often face challenges when it comes to operating their companies efficiently and affordably. The concern for the company's health often makes them take on too many things and supervise every detail. This leaves them exhausted and prevents the business from growing as it otherwise would. This also thwarts the development of new skills among employees and deters them from being creative.

So how do you keep your company healthy and growing without spending too much? One great option is to outline the areas in which you are lagging and outsource them.

So how does the mechanism of outsourcing help? Though this question depends largely on precise needs of the company, economic experts feel there are a lot of general advantages of outsourcing responsibilities to an external agency.

According to Rohan Bhansali, Co-founder and Director of Gozoop, India's largest independent digital agency, in order to stay competitive in the business circuit, companies are increasingly depending on outsourcing to make their operations more inexpensive.

"Past two decades witnessed steady increase in outsourcing as companies of all sizes jump onto the bandwagon. It's estimated that in the US 300,000 positions are outsourced annually," he stated.

Cost savings, said Bhansali, is the main advantage that outsourcing brings in. "Even if you find the IT guy with the desired qualification and knowledge, it is likely to cost you a large amount of money. Outsourcing comes to you as a boon. In addition to hiring a company that already specializes in IT infrastructure, it gives you the cost benefit, which is often a fraction of what you would pay a full-time employee," he elaborated.

Another beneficial offering of outsourcing is the seamless support it enables. "If the IT resource of your firm wants to go for a vacation, he will not be getting calls just because a printer isn't working. The model of outsourcing expunges this concern as multiple points of contact are operational with most of the consulting agencies," he added.

Himadri Das, a HR & Legal Compliance professional, having 10 years of experience with MNCs & Indian conglomerates, considers flexibility in engaging staff i.e. hire and fire as and when required, the best part of outsourcing.

"You don't need to maintain huge headcount to achieve economy of scale as manpower can be acquired immediately on a contractual basis. Outsourcing is a very good proposition for startups in manufacturing that are looking to scale up fast," he opined.

"Legal compliances are relatively less in this case compared to permanent manpower under Contract Labour (Regulation and Abolition) Act. Companies in services sector e.g. Flipkart/Amazon predominantly engage blue-collar resources for meeting seasonal demands. Moreover, changing market dynamics/fast scaling up/expansion can all be handled with outsourcing, provided due compliances are put in place," he asserted.

Roopen Roy, former managing director of PWC India and Deloitte Consulting India and Founder and CEO of Sumantrana, (a strategy advisory firm), strongly vouches for knowledge transfer as a creditable benefit of outsourcing.

"With the IT resource quitting suddenly, valuable information, data regarding network and IT infrastructure could get lost or misplaced. Network security is another concern and so is the possibility to function efficiently in its temporary absence. Outsourcing does away with these worries by guaranteeing numerous resources and records that can be shared within your team," he concluded.

However, while opting for outsourcing, do ensure better competence of the in-house team, by allowing them to focus on their core area of competence. Outsourced resources are typically specialists in their individual fields hence are extremely skilled at what they do and can do it faster.

As the professional reputation of outsourcing firms depend on your good reviews, it is also in their best interest to provide you with best possible skill-sets.

Baishali Mukherjee

Former Freelancer

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