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Generally it is assumed that monitoring over the employees, tasks being executed by people with the delegated objectives is the perfect and best way of working, but Business Process Outsourcing (BPO) has proved it to be wrong. Assigning tasks to people who are not in direct contact with us, who are not our direct employees and are out of our reach, can improve cash flow and efficiency.
Domestic jobs always tend to be much more costlier than jobs which are outsourced from offshore or nearshore locations. Outsourcing is not only better for the companies but also for employees as it is noticed that the yearly salary of those working for Western countries are always higher. Even start-ups and small business companies can have tremendous benefits by offshoring their tasks.
How Outsourcing improves cash flow
• Outsourcing to locations like India or China, can be a great option for Western countries as their cost of living is much lesser than the Western countries. So the outsourced jobs will be costing much lesser compared to the jobs done by in-house employees, thus saving a huge amount of money.
• Offshoring also provides the opportunity to standardize and centralize all activities, including small to medium activities into a team which is offering scalability and cost efficiency.
• BPO companies generally have long years of experience, they are equipped with skills required for the task and are also using the standard best practice and tools. It enhances the ability to increase the retention and loyalty of customers and knowledge, the two most important factors which increases the profitability and strength of the company.
• Through outsourcing we are connecting with specialist labour pools including dedicated project managers, skilled team leaders and well-trained employees, who can provide strong and stringent quality tasks, hence helping the companies to build a strong customer base and improve their market.
• Global outsourcing destinations such as India and China can provide huge workforce. Due to the bigger population of these countries, thousand graduates are produced every year, resulting in increase in the competition in finding a job. This works well for Western countries, as they can directly hire huge number of workforce by offshoring jobs to these countries, saving their time and money.
• It also provides the opportunity to rationalize the number of locations and ERPs involved in one single task, opportunity to deploy the best available software, hence increasing the efficiency.
Outcomes of Improving Cash Flow
• With the reduction in operational cost, the company will be able to spend much more on the more important elements of growth including development, training and expansion. Hence ensuring the continuous improvement of the products and services and also the ability to provide what exactly the market needs. It will build a trust and loyalty within the customers of the company, and improve the overall market growth.
• With outsourcing the company can get their tasks done in much cheaper rates and doesn’t have to spend much of their profits on functions, without even sacrificing with the quality, so it will help the company reach its goal much more easily and faster.
• With higher income, the company will also be able to attract and hire better managers and team members. A strong and solid workforce delivers better performance along with speeding up the whole work cycle, hence increasing the profit and growth of the company.
• The money saved on operations can also be used to improve the infrastructure of the company, buy quality tools and equipments and working on the improvement of productivity.
• Through offshoring, any task will be done in the best possible way as several different ways of doing the same task is considered and out of them the best practice is selected.
• BPO is also beneficial as it removes the worry of recruitment of workers, holiday cover and management and motivation of the team.
All in all Outsourcing can be beneficial for both big and small companies, in enhancing their profits, increasing their sales, build customer relationships and for the steady and higher cash flow. Various multinational companies have already started outsourcing their call center service and back-office functions in order to reduce their overhead and operational costs, but the small companies are still away from it. Many BPO companies are offering good deals and packages for small businesses and start-ups, along with ensuring good quality services. So all other business companies must also opt for offshoring their businesses and see a clear change.