Outsourcing A Wonder Remedy for Strategic Gains

  Though considered a cost-cutting measure outsourcing has many benefits. Outsourcing not only saves costs but also saves time and crucial resources. It has become a boon for backend service providers the World over.  It becomes beneficial for companies when the core focus does not allow resources for functions that could be easily managed by backend service providers at lesser cost and greater efficiency.

The process leads to a reduction in high-salaried staff, saving on salary, perks, and other financial aspects.  The gains compound when an efficient outsourcing company takes over the task. In simple terms, the process leads to less stress on the management. The additional advantage is the talent utilization of the hired company. The strategy also saves companies from managing the complexities of complicated tax laws, looking after regulatory compliance and rules and regulations.   

Outsourcing is an Agreement    

The process is an agreement between a company and the outsourcing agency. The hiring company shares all the necessary details for the BPO to perform a specific task. A communication network is established between the two and regular transmission of data takes place.

Types of Outsourcing

• Professional outsourcing.
• IT outsourcing.
• Manufacturing outsourcing.
• Project outsourcing.
• Process outsourcing.
• Operational outsourcing.

The business practice may entail full-scale participation by the third-party service provider or a part of the work could be allotted. Hiring a company outside one's domain is not that easy a lot of survey and fact-finding has to be done. Hence the contract takes place in three phases decision-making, transition, and final contract.

There are many risks associated with this business practice like loss of control, unsatisfactory performance, and loss of privacy. The process is not fraught with risk but if the outcome is good the gains are spectacular. This is one-way outdoing competition as a strategic measure. Many large-scale companies are outsourcing business practices for gains and to focus on the core.    

Payroll Outsourcing

While many business processes are outsourced, payroll and employee management services are also handed over to a third party. The payroll market size is valued at 9.9$ billion USD. By the year 2031, it is expected 19.5 billion USD to grow at the rate of CAGR 7.2%.

Automation has taken place through the development of Spine HRMS a software tool in India.  It is one of the best suited for payroll, employee and asset management in the country. Many payroll outsourcing service providers in India use the Spine HRMS tool.  Over 52% of businesses over the World outsource pay and employee management services.