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How to choose the best outsourcing companies

How to choose the best outsourcing companies

One of the greatest challenges that firms face today is finding the best outsourcing companies to entrust a portion of their operations. 

Outsourcing has been around for a long time and has proven to offer several benefits, particularly in terms of cost savings and efficiency. However, the market is now rife with vendors, which makes it hard to choose a partner, especially for the long term.

How do you choose the best outsourcing companies, and what services should you contract? Learn all you need to know about finding the right outsourcing partner in this guide. 

Why do companies outsource?

Outsourcing has proven to be the most practical solution to a wide range of business challenges. We’ve compiled a list of reasons why companies turn to outsourcing below.

Lower cost

The main reason most businesses outsource is to save on expenses, and this is understandable. Outsourcing can help you free up capital to invest in other areas of your organization.

Businesses are constantly seeking ways to reduce operating costs and boost their profit margins as the market becomes more competitive. Because of technological advancements and the globalization of business practices, outsourcing destinations worldwide can now deliver high-quality labor at a lower cost.

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Why do companies outsource?

Focus on core functions

When businesses venture outside their area of expertise, they tend to divert their attention away from their core operation.

Their primary resources are optimized when non-core processes are performed by an external party of experts through outsourcing. With this, crucial in-house teams can focus on developing and expanding partnerships, boosting revenue, and improving service offerings while providing the most excellent possible customer experience.

Boost efficiency and flexibility

The best outsourcing companies are equipped with the latest technology and expert manpower you need to adapt to the ever-growing demands of the market. This is especially beneficial for budding small companies with limited resources. 

Providers also allow businesses to maximize flexibility so that they only get services when they need them, such as seasonal or holiday demands.

Improve risk management and maintain continuity

Many companies are attracted to outsourcing because of the security it provides. It ensures that critical operations are carried out and fulfilled with minimal disruption. 

Outsourcing also allows management and internal resources to focus on staying flexible and, if necessary, adjusting to new company strategies. 

4 common models of outsourcing companies

Your choice of provider will be determined by the level of support your company needs. Needless to say, you should choose the best outsourcing company that specializes in the processes that you aim to contract out. 

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Here are the four common types of outsourcing companies you can look into:

Project outsourcing

As the term suggests, project outsourcing is focused on specific activities or projects that usually span a short period. These are usually one-off projects like web development or advertising campaigns.

Contracting your work to project outsourcing firms is helpful if you don’t require full-time assistance. 

Manufacturing outsourcing 

Outsourced manufacturing is another common model of outsourcing. Because of the high cost of raw materials and labor, outsourcing this operation can help companies cut expenses and set more competitive product prices.

For example, Western companies outsource their manufacturing operations primarily to Asian countries such as China because of the lower labor cost.

Professional outsourcing

Another common type of outsourcing is contracting professional assistance from a third-party vendor. Accounting, legal, purchasing, and IT support are common services offered by professional outsourcing companies.

The most significant advantage of professional outsourcing is that you only pay for the services you receive. There are no fees associated with recruitment, legal counsel, or training. In some cases, you won’t have to spend on equipment either. 

Regardless of where your organization is physically situated, you can access world-class expertise for a reasonable price.

4 common models of outsourcing companies

Business process outsourcing

One of the most prevalent business practices in modern times is business process outsourcing (BPO). Businesses farm out non-core business processes such as customer service, data processing, and back-office operations. 

Outsourcing these functions allows a company to scale while keeping its focus on core strategies.

4 tips for finding the right outsourcing company for you

The best outsourcing companies will assist you in mapping out business processes and determining the optimum outsourcing model for you. 

Here are some of the things you have to consider when choosing outsourcing companies:

Inspect their operations

You know your business best, and you want a partner who will devote themselves to your success. Examine an outsourcing partner’s potential to expand alongside you.

Check that the outsourced provider has access to information and communication channels, such as email, phone lines, and instant messaging. Their information technology infrastructure should also be up-to-date and working efficiently.

Data security

When selecting an outsourced contact center, your customers’ data security must be a top priority. It’s critical to examine the resiliency and variety of the provider’s IT enterprise infrastructure, as well as the services they provide.

You may enlist the help of your internal IT and legal specialists to come up with a checklist of questions to ask your potential outsourcing partner. 

4 tips for finding the right outsourcing company for you

Company location

While there are benefits you can obtain regardless of where they are, there are also specific advantages to considering the location of your outsourcing partner. 

For instance, if culture fit or matching time zones are crucial for you and you’re in the US, then you should focus on providers in Latin America. If low-cost labor is your priority, however, then Asian countries like the Philippines or China are your best bet.

Cultural compatibility

Working with an offshore firm where the staff is fluent in the primary language of your business reduces misunderstandings and disinformation and encourages a lively exchange of ideas.

Apart from that, your outsourcing partner must be familiar with your company’s culture. It includes how employees communicate with one another, how often they interact, and whether they work individually or collaboratively.

Even when there are disputes, understanding all of these will make communication more direct and uncomplicated.

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Outsourcing companies can assist you in making the most crucial business decisions for your company. They allow you to focus on your major strength as a sales machine instead of managing people and their tasks. As a result, you’ll be able to expand and scale more quickly.

The Philippines is a world-leading outsourcing destination. The country has become the site for the satellite offices of companies around the world and across industries — from manufacturing to IT and communication.

Outsource Accelerator, the world’s top BPO marketplace, advisory, and operator for companies worldwide, lets you tap into the best outsourcing providers in the country. Check out our outsourcing directory to get started.

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About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 450+ podcast episodes, and a comprehensive directory with 3,900+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.

“Excellent service for outsourcing advice and expertise for my business.”

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