South Africa

Five competitive advantages to business process outsourcing

Five competitive advantages to business process outsourcing
Business Solutions Executive:
FunxionO
3 mins

It’s a common problem: businesses invest time and resources in recruiting, onboarding and training employees to fill specific process roles, that aren’t necessarily part of the organisation’s core competencies. Instead, these are non-core operational roles that the business requires to function.

A manufacturing business’s core competency, for example, is the innovation, process design and production of specific products, not warehousing and container loading and off-loading. So, why invest so heavily in these departments and job functions?

Strategic outsource partners can help organisations to reduce overhead expenses, improve operational efficiencies, and free up resources to invest their time and energy into core competencies.

What is strategic process outsourcing?

Strategic process outsourcing is when an organisation contracts specific processes and business functions to third-party providers. Most businesses outsource their IT and cyber security functions, but there are many other areas that can be outsourced, particularly when it comes to operational processes. These include raw material handling, palletising and packaging, merchandising, warehousing, and even sales call centre staff.  

Here are 5 strategic benefits to process outsourcing 

  1. Improved focus on core business activities

It’s more efficient to spend your time doing what you’re good at. If your business exists to manufacture specific products, then that’s where most of your time and energy should be focused. But there are plenty of tasks across every business’s value chain that don’t play to their core business function. Every minute spent outside of your core focus is time spent inefficiently and ineffectively. Your biggest cost savings, in terms of cash, time, and stress, is to outsource things that aren’t your core business focus.

  1. Increased efficiency and productivity

Choosing an outsourcing company that specialises in the process or service you require helps your entire organisation to become more productive and efficient. A well-run supply chain comes down to people and processes, and when your partner is an expert in best-practice processes, the natural result is an increased competitive advantage. Remember, you’re leveraging knowledge, skills and functional expertise that you do not need to have in-house.

  1. Controlled costs

Recruiting, hiring and training full-time skilled employees is expensive, especially for shorter-term projects. When you outsource, you convert fixed labour costs into variable costs, meaning you only pay for the services you consume. This gives you staffing flexibility that doesn’t exist with in-house employees. Outsourcing allows you to tailor your service consumption to your needs. You only pay for what you use and can seamlessly scale your consumption when business picks up or slows down. A specialised outsourced partners also streamline processes, identifying and maximising all possible cost efficiencies. 

  1. Increased capacity, speed, and quality

Amplify production and scale up and down to meet organisational needs with a partner who understands your business and is able to plan ahead with you to ensure you have the capability and processes in place as you require them. Outsourced partners are experienced in delivering functional solutions and processes to client standards and specs without other day-to-day organisational priorities or distractions. This ensures high-quality output, at the right time, without the cost burdens mentioned above.

‍5. Outside perspective and knowledge transfer

Working with a process outsourced partner means you can benefit from best-practice processes, training and onboarding without specialising in those processes yourself. Through years of experience – and employing specialists in their fields – outsourced partners are able to help you design the best process for your business and share knowledge and expertise both upstream and downstream of the process in question.

Choosing the right partner 

Finding the right process outsource partner can result in a mutually beneficial long-term relationship. As a partner gets to know your organisation, it’s processes, people, and core competencies, overall productivity and efficiency will improve, risk factors associated with particular non-core functions will be mitigated and your business’s competitive advantage will increase.

How we can help

Want your working world to spin more smoothly? FunxionO specialises in process outsourcing to enhance output and efficiencies in your entire value chain, ensure business continuity, and reduce costs.

You may be interested in:

Business Solutions Executive:
FunxionO

Related articles

Workforce insights delivered!
Sign up now for our weekly newsletter.