Outsourcing in online technologies, as a common phenomenon for business, appeared 10-15 years ago and today it is difficult to find a head of a large company who would at least once not think about delegating some of the areas of his business to outsource, especially after the global crisis that broke out in 2008.
Then, in the conditions of falling markets and uncertainty in almost any business area, the issue of optimization of all areas of the company’s activity and business reorganization, which would allow it to maintain profitability in a difficult period, became extremely urgent.
Many companies, including today’s market leaders, made a strong-willed decision at that time – and outsourced some of their operations. In most cases, this brought the desired effect, and today those businesses that once decided to take drastic measures are firmly on their feet.
But more than a decade has passed since then, the markets have recovered, the S&P 500 chart is only moving up, and it’s time to ask yourself – how can outsourcing companies help your business today?
We spoke to Dr.Victor Paul a senior representative of the Singapore outsourcing company Virtual Electronics PTE. LTD, specialized in providing services for the development of mobile applications, websites and integration of cloud systems in business management:
We know that your main office is located in Singapore, so let’s start with the question of how the structure of a successful outsourcing company should look like today?
Indeed, our main office is located in Singapore, and our development offices are located in Eastern Europe. At the same time, almost all our clients are companies from the USA and Western Europe. For an outsourcing business that operates in the field of technology, it is now quite a rational structure and each element of this structure directly affects our profitability and efficiency. For example, Singapore is one of the best places in the world for doing business, and Eastern European countries such as Ukraine and Belarus have great potential in the field of technology: there is a sufficient number of highly qualified personnel and a very moderate tax burden in the IT sector of the economy. Tax rates will be several times lower than, for example, in the US and the EU.
What are the main reasons why businesses today use the services of outsourcing companies?
There are dozens of reasons why business is interested in outsourcing. If we proceed from the entire experience of Virtual Electronics – most often entrepreneurs are driven by the desire to save money, and you can not ignore the desire to use the services of a qualified specialist, who can not be attracted to the staff on a permanent basis.
For example, your company plans to produce a brand book that will be actively distributed in the international market. And most often, there is no designer of the level that would correspond to this task in your company. Hiring him for you is not rational: in the future, the designer simply will not have a stable flow of tasks. Then the manager attracts a specialist in outsourcing – a designer, usually more professional than applicants for a permanent job. In fact, anything can be cited as an example: turnkey sites, mobile applications, or connection for a 24/7 client professional technical support around the world, all of this can also be outsourcing.
In this case, which business is more profitable to order outsourcing – small or large?
There are some advantages to both small and large businesses. For example, outsourcing some functions to small businesses helps to avoid mistakes due to inexperience, save money and maintain a comfortable number of employees for small businesses. That is, thanks to outsourcing, small companies use the services of specialists of such a level that they are not able to attract to the team on a permanent basis.
Large companies using outsourcing get an independent view from the outside, ideas for updating and optimizing work processes. Even if the goal to save on staff in a large company is not worth it, outsourcing guarantees a competent distribution of resources. Transferring tasks to remote specialists relieve the burden on the team, which can concentrate on their main tasks.
What advice will you give to those companies that are planning to use outsourcing or can’t decide on such a decision?
When transferring part of your functions to outsourcing, there are two important principles that every business manager should know. The first principle is that you can outsource part of your company’s business processes only when the company that will take over these business processes is more competent to manage these processes than the company that will outsource them. Simply put, you should not resort to outsourcing when there is a high probability that the outsourcing company that you entrust this work to will cope with it worse than you will do.
The second principle is not to outsource the functions of the company that is its competitive advantage or forms the basis of its business. Agree, if a company that specializes in creating sites, suddenly outsources the stages of creating a site (design and prototype, layout), in this case, the company will become a simple advertising agency that is looking for customers to develop sites. Isn’t it strange? Of course! That is why you should outsource only secondary activities, hoping that the released or saved resources will be able to give your company an additional impetus to development.
The principles are very sound. And there is another issue that often worries potential clients of outsourcing companies – It is the observance of data privacy and trade secrets. How are they guaranteed?
All outsourcing services are provided under a contract in which the owner specifies the conditions under which the cooperation is planned. It is clear that the business cares about the confidentiality and commercial secret, that the private information has not been leaked to unauthorized people. A good outsourcing company enters such conditions into the contract and strictly fulfills them. At Virtual Electronics we include privacy clauses in our basic agreement.
Thank you for your answers! We hope that your answers will help determine those business owners (which are among our readers a lot), who will have to make a decision about cooperation with outsourcing companies.
If you have questions for a Virtual Electronics representative, you can always ask them on their official website.
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