How to reduce IT Support Costs by outsourcing
Overview of Outsourcing
Outsourcing is the process in which an enterprise assigns some of its functionalities to third parties with the objective of enhancing the overall business productivity and thereby enabling better cost savings. In outsourcing, the back end of the secondary functionalities of a company is performed by dedicated service providers.
Why Outsourcing?
Outsourcing to reliable partners enables an enterprise to gain better flexibility in their day-to-day operational functionalities thus enabling them to enhance their business quality. This enables them to cut down their costs as they need not worry about the fluctuations in their daily operations and make any upfront investments. Outsourcing enables you to leverage the services of the best pool of talent. It enables you to get rid of lump-sum investments and expenditures for acquiring pricey tools, technologies, infrastructures, etc. But outsourcing should not be at the expense of quality. Therefore it is of utmost importance to ensure that you outsource to quality service providers with a good reputation and track record.
Importance of Outsourcing
An IBM report says that about 27 of the enterprises outsource to reduce costs. According to an article by Harvard Business Review, outsourcing enables enterprises to reduce costs by 20 to 30 percent. According to a study conducted by Deloitte, about 64 percent of the respondents consider cost savings as one of the key drivers for outsourcing.
Let’s now see how outsourcing helps you in reducing costs.
How Outsourcing Enables to Decrease the Costs?
1) Outsourcing Cuts Down the Cost of Dealing With New Recruitment
Recruiting new professionals is not an easy task. A lot of overhead is associated with recruiting new staff. Once you hire new recruits, you need to spend money on their training and upskilling. It can further take a toll on your internal resources. If you do not have the in-house resources to upskill them, you need to avail the services of experts for their training. This can all consume cost overheads. As per Gartner, when recruitment is accelerated, it might lead to a 32% reduction in the cost to hire. Outsourcing the functionalities to experts relieves you from the troubles with regard to recruitment, induction, training, etc.
2) Outsourcing Enables You to Drive Your Investment Costs for Better Productive Activities
Outsourcing enables you to save your investments and thus drive the same for better productive activities. According to a 2019 Impact of Outsourcing Study that was conducted by Q8 and LLC, about 98 percent of respondents revealed that outsourcing enables them to deliver better investment solutions. There is no need to make any upfront investments for pricey infrastructure. The service provider has the best infrastructure and industry-proven tools that enable an organization to deliver quality services.
3) Outsourcing Eliminates Cost Overheads Due to Operational Fluctuations and Associated Risks
Outsourcing to support providers enables you to spread the risk as compared to the case when the operations are in-house. If there is a sudden spike in needs, the service provider can scale up their teams to meet your day-to-day business needs. If there is a downturn, your operational demands may be drastically reduced, so maintaining an in-house team can result in unnecessary overheads. Thus outsourcing enables better sharing of the risk and thus avoids unnecessary cost overheads, which is not possible with an in-house team. Outsourcing can also enable organizations to offset the damages caused by crises like natural disasters, cyber-attacks, etc to an extent by ensuring that your day-to-day operations are not brought down.
4) Outsourcing Enables to Cut Down the Labour Costs
According to Derek Gallimore, outsourcing can enable organizations to save at least 70 percent of their labor costs. There are several cost overheads associated with having in-house employees apart from their salary, like medical benefits, insurance, etc. Having an in-house team of employees also incurs overheads associated with costs related to physical office space, tools, technologies, and infrastructure requirements in terms of computers, laptops, etc. Outsourcing thus enables you to have access to a larger talent pool that can provide you and your customers with timely delivery of quality services with minimal cost overhead.
Conclusion
Outsourcing offers several benefits to a business like access to better expertise, technology, tools, and processes thus enabling an enterprise to deliver better quality services. One of the main drivers for outsourcing is its cost-saving capabilities. It can enable enterprises to save costs that are associated with labor and onboarding of new human resources as well as getting away with the need to make upfront investments for expensive infrastructure.
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