Promoting local business is always good, for several reasons. Not only does it ensure the reliability and accountability of your transactions with various businesses, but it also helps in the development of your local community in keeping your resources and capital development in your own area.
However, with these benefits come drawbacks which, depending on the type and model of your business, can be detrimental and be too much a cost. For instance, since you live in the same economic environment, whatever problems that are happening to your company may also be affecting your partner business as well, taking the both of you down.
In today’s social climate, tapping into the global community and the internet is turning into an attractive solution for many businesses, with over $88.9 billion dollars in the outsourcing market.
“Because of outsourcing,” explained software development company Exeter Studios CEO Jonathan McAllister, “we’re able to have the best people to work with us. Not only that, they are hardworking people who are dedicated in giving the best output.”
In a report written by Dianne Carillo for Customerthink.com, companies cited several reasons why outsourcing jobs is an ideal solution for many companies. This article will be a discussion on these justifications.
Considering the living expenses in developed countries, employing people from places such as the United States can be expensive. McAllister mentioned that one American software developer should have a minimum annual salary of $100,000 to be gainfully employed. Meanwhile, hiring someone, for instance India or the Philippines, will only be a fraction of the cost.
Many take issue in this justification, saying that it exploits workers in other countries. While this is true in many cases, the fact is that salaries are high in many countries because the cost of living there is high. For example, in the Philippines, it takes only around $800 for a family of five to live comfortably, according to the country’s National Economic and Development Authority (NEDA), while it may take as much as $1,100 for a single person to live in places like New York.
The important thing to remember is to know the practices of the business concerning their offshore personnel: that they take care of their people according to their needs so that they are not only paid reasonably, but in a way that they can also improve their lives.
Enable Focus on Core Businesses
Having others take care of small details like bookkeeping, advertising and marketing, among others can free business owners and decision-makers to focus on more important and crucial aspects of the business. Outsourcing certain aspects of the business can give you more time and resources to develop your services and products, which can not only increase the quality of your business, but increase its market as well.
Solves Capacity Issues
Having an office means needing a location to have your office on. This needs real estate, infrastructure, and equipment: all of which will require considerable capital. by not needing a physical office space, you can save your resources to invest in other aspects of the business, such as developing your brand.
Aside from that, by not needing an office, you can be a full-fledged, full service company from your own home, which is a welcome option for anyone fed up with the grind of traditional office life and the daily rat race.
Enhances Service Quality
Because location is no longer an issue with outsourcing, companies like Exeter Studios are able to get the best from all around the world. This translates into better services, coming from skilled and experienced people who have a deep understanding of what is needed for the job at hand.
By tapping into the world community, companies who outsource have the potential to become a world-class business. For Exeter Studios, their employees from all over the world can help bring global solutions for its partners.
Critical to Business Needs
Different businesses have different demands. A disadvantage of staying local is that one is confined to local options that may not address these needs and challenges in the best way. The worst case scenario in situations like this could be not being able to find a business solution at all, which can snowball into the business’ decline and closure.
Opening up to the world through outsourcing enables business owners to find the best possible solutions from all the options that the global community has to offer. As you as you take time to look for the people that you need, your business can benefit greatly by getting the best people from all over to fit your needs.
Access to Intellectual Capital
Again, this all stems down to not being chained down by location to find the best possible talent and people for the job. No place has monopoly for talent, and you’d be surprised at how you’ll find brilliant people from all over the world from the most diverse lifestyles and cultures.
Another aspect of outsourcing that is not always appreciated is the cultural differences. Outsourced employees usually come from a different social and cultural background: and with it, a different outlook and perspective. Having people from various cultures gives you a pool of unique approaches and solutions to pick from; with surprising results.
Manages Business Environment
One thing drawback of the traditional business environment is that, because their employees are always around, business owners assume that the business will take care of itself. This can result in sudden, often unanticipated drawbacks that could have a critical impact on the business.
With your outsourced employees living far from you, regular communication and deliberation becomes crucial. A welcome consequence of this need for regular meetings is that business owners will not only have a deeper understanding of the things that happen in their company: but both employees and employers will have a greater appreciation for each other as well.
Drives Broader Transformational Change
In Carillo’s report, most of the top ten countries offering outsourcing come from developing countries. By tapping into outsourced workers, you as a business owner not only cut costs on operational expenses, but you can improve the lives of your outsourced employees as well. In this day and age where social advocacy and social justice are the prevailing mantras, your company can have far-reaching effects in the upliftment of the world community, simply by reaching out overseas.
Edwin Oscar U. Gutierrez, Jr//Exeter Studios, LLC