3 ways outsourcing saves both time and money

People have always exchanged services and shared things. But it is only in the past ten years that sharing has become an essential part of the economic process.

3 ways outsourcing saves both time and money

In the late 2010s, companies that worked on such principles could be counted on one hand. But their number grew rapidly. There are many reasons, one of the key ones is the great recession that followed the 2008 financial crisis in the US and the EU. The economy barely grew, as did the incomes of the population. It became more difficult for people to plan large purchases. Therefore, many happily moved from private cars to Uber, founded in 2009, and instead of their own house on the seaside, they began to spend vacations in housing rented on Airbnb.

Since 2011, sharing is on the list of 10 ideas that will change the world, along with forex trading. Someday we will look back at the 20th century and ask ourselves: why did we own so many things?” Joint consumption will not only slow down overproduction and save money but also have positive psychological effects: according to scientists, when someone entrusts us with their things, we experience a surge of oxytocin.

The sharing economy has grown at a tremendous pace over the past decade. In 2019, the blog of the World Economic Forum has already called the past decade “the decade of the sharing economy.” The authors of the blog predict that by 2025, the share of the sharing economy in the total revenue of companies around the world will reach 50%. Although back in 2013, it was only 5%. The Chinese authorities expect that by the end of 2020, the share of the sharing economy in GDP will reach 10%. Last year, the first IPOs of share companies took place: Lyft was placed with an estimate of $15 billion, Uber — at $120 billion. And this even though none of them has yet gone into profit.

  1. In Nigeria, companies outsource processes for two reasons: the desire to save money and the need to attract specialists who are simply not on the staff. In 2020, entrepreneurs said they intend to increase their outsourcing costs. It can also significantly improve the quality of personnel: if accounting or HR is not the main profile of the business, it cannot afford the best accountant or hiring specialist. But a specialized company can.
  2. In general, the effectiveness of business process outsourcing will depend on whether the company correctly assessed its necessity. Forextime advises CFDs trading and giving IT contractors, not in all cases. There are several situations when this is justified — for instance, you need niche expertise, or it is crucial for a business to make a product viable in the shortest possible time (reduce the time to market).
  3. Today, it is obvious that outsourcing of business processes is not just a trend, it is a really working tool for optimizing and increasing the efficiency of companies. If you study the whole pool of solutions in this area, you can choose the ones that are suitable for the needs of your particular company.

Sharing principles are conquering not only the B2C market but also the B2B market. More and more companies are outsourcing their business processes. This applies to both large corporations and very small firms. The pandemic has predictably spurred the growth in demand for Business Process Outsourcing (BPO). By 2025, its volume will reach $114 billion with annual growth rates of 5-6%. And in some segments, in particular, in the field of HR, even higher. It will grow primarily due to customers from the USA, Germany, and Japan. The most active users of outsourcing services in the United States are medical and airlines, in Europe — telecommunications and the automotive industry.

The main supplier of BPO services in the world is India, in second place — Ireland, in third place — Asia. In some countries, BPO has become a significant source of economic income — for instance, before the coronavirus pandemic, it accounted for about 8% of the Philippines’ GDP. Eastern Europe has a very small share of the global BPO market, but it has great growth potential.

The largest market segment is IT outsourcing. According to the forecast, in 2018–2022 it will grow by almost $80 billion. In general, the global business outsourcing market can be divided into several blocks.

By the type of what they give:

  • Horizontal processes (common to all industries)

The easiest way is to outsource what is not at the heart of the business: accounting, recruiting, legal consulting. Marketing and sales fall into the same category.

  • Vertical processes

What the main business is tied to. For instance, data analytics or complex IT processes.

By the way it is organized:

  • Conventional outsourcing 

Everything is clear here: a company orders a solution to a business problem from a third-party firm on a turnkey basis.

  • Cloud-based 

In this case, outsourcing services are more standardized. They are usually provided by a platform that is used by several clients at the same time. Such solutions are called SaaS — software as a service. It is predicted that this form of outsourcing will be actively developed shortly: 95% of American companies already use the cloud in one form or another.

JOIN OUR PULSE COMMUNITY!

Eyewitness? Submit your stories now via social or:

Email: eyewitness@pulse.com.gh