Not too long ago, as you built your business or grew your small business, you added more people for specific positions. Reach this size of activity or turnover and hire an accountant. Now that our business has moved beyond word of mouth, we can hire a marketing associate. Need to do more financial analysis let’s hire a financial person. While this all seems normal, it may not be the business model of the future. The business model of the future may focus more on its core expertise and begin to outsource the rest. The outsourcing industry is on the rise.
According to Grand View Investigation, the global business process outsourcing market is worth $245.91 billion by 2021. With a CAGR of 8.5%, revenue is forecast to reach $435.89 billion by 2028. There is clearly an ongoing mega trend of investing in outsourcing. Meanwhile, one 2021 Survey from Clutch.io revealed that eight in ten small businesses had plans to outsource. They wanted to do this to grow their business, cut costs, save time and access specific expertise from around the world.
Small businesses, from bakeries, software startups, hotels and even plumbing companies have realized that they don’t have to do everything. As competition increases and the cost of everything rises, including rent, operation, energy, etc., what if a plumbing business simply existed through its vehicles and plumbers, had no business location or overhead, and focused only on serving customers while the rest of the company was in the cloud or outsourced? Does a small hotel really need staff or can the owners just focus on providing the best customer service through digital technology while outsourcing reservations, cleaning, accounting and marketing? Sound possible? Sure.
Let’s take a look at some of the key trends enabling outsourcing across a wide range of companies and industries.
Retaining top talent will be a challenge. Crazy times. The pandemic has fueled or exposed people’s dissatisfaction with their jobs, especially at a time of high employment, giving people the opportunity to jump around for more pay or benefits or even more time. Instead of taking on that hard-to-find talent, consider hiring or outsourcing the job.
Cloud-based technology enables anytime, anywhere access. It used to be that you had to be at the office or company location to access the data you needed to do your job. With business applications in the cloud, you have direct access anytime, anywhere. This allows remote workers or remote workers to complete their work without being at your company’s physical location.
Remote/hybrid working might just be here to stay. From a culture perspective, some people say that a company’s culture will suffer from remote working. But if you only need a part-time accountant and you can outsource that range of tasks, do you really care where they are and even who it is?
Security is getting better. While you will always fear the hacker breaking into your company’s systems, the reality is that your company is probably more secure in a cloud-based solution from Amazon or Microsoft. And with dual authentication (two-step login), the chance for someone to access your data is greatly reduced.
Automation and AI will grow. As large companies continue to invest in advancements in automation and artificial intelligence (AI), the benefits of those investments will come downstream to small businesses. Redundant tasks, predictable work, and even analysis could just be done dynamically in the near future. As a result, companies can actually operate with less staff and/or work and, in theory, deliver better products or services at lower costs.
Having said this, outsourcing is not something to jump into without carefully considering the pros and cons. The pros and cons of outsourcing vary depending on the individual company, the tasks being outsourced, and the corporate culture. The key is to embrace a business model and philosophy that keeps key employees happy and customers ecstatic.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.