Outsourcing Administration Services | Benefits, Pros, and Cons
While outsourcing has been around for many years, it is becoming increasingly popular now as more and more businesses are seeing the benefits of it. Outsourcing is just hiring another company to perform some of your business processes. Businesses looking to streamline their services and cut cost are looking into outsourcing. Businesses both large and small are taking advantage of the benefits of outsourcing.
The administrative process is a vital part of a company’s success. In order for your business to run smoothly you will need quality administration. Many business owners today are turning to outsourcing for their administration duties as a way to cut cost and increase quality. It’s also proven to be an excellent choice for a business that is wanting to grow.
Some of the common administrative tasks that are outsourced are:
- Data entry
- Order entry
- Accounting and payroll
- Help desk
Top Benefits of Outsourcing Administrative Processes
Cost savings: Cost savings is the primary reason business owners turn to outsourcing for their administrative processes. With the rising salary costs and the increasing competition many businesses are needing to do what they can to cut costs while also maintaining great products and services. Contracting out administrative processes lowers overhead expenses and allows you to effectively scale without needing to hire additional in-house employees on salary and provide the office space for them. Not to mention, the need to provide employee benefits for the additional staff as well. In a survey from the Outsourcing Institute, businesses stated that though outsourcing they saw on average they saw a 9% reduction in costs.
While Administrative Services are needed to effectively run your business, unfortunately, don’t make money. Instead, they make it possible for you to make money — use the extra money you will save by outsourcing to invest in increasing your bottom line. You could use the extra cash towards revenue producing tasks like additional marketing, product development, or fund other projects you may have in the pipeline. So in essence, outsourcing is a great way to scale your business and take it to the next level.
Focus on core business tasks: Administrative processes could be pretty time consuming. Outsourcing these duties will alleviate some of the stress, distractions, and frustration for you and your employees so you all could focus on the most important tasks. When you and your in-house team are not having to spend time on those processes you all are able to focus on the core tasks of running your business to make it most successful and profitable. You will also be able to spend the extra time on planning and implementing growth strategies.
When you are not distracted by administrative tasks that are non-revenue producing, you and your in-house employees will be more productive and able to focus on revenue producing tasks that will scale your business and take it to the next level. Studies show that when workers can limit interruptions, they are happier and more satisfied with their work so your employees will be more productive. It’s a win-win situation. Here are some statistics on workplace distractions:
- 34% of employees like their jobs less when they are in a distracting workplace
- 66% of workers have never discussed solutions for workplace distractions with their managers
- 75% of employees are more productive when workplace distractions are reduced
Technology: With the ever changing and advancing technology it’s difficult for businesses to stay up on the latest trends that would keep them up to date and running smoothly. When you outsource your administrative services to a company that specializes in providing these services it’s their responsibility to have the latest up to date technology, which could be very costly.
Lower your risks:When you outsource your administrative services you are able to lower your risk and essentially free yourself from many problems that come with handling the processes in house, for instance licenses, regulatory, unions, etc.
Flexible round the clock service: Most outsourcing companies adjust their services to fit the needs of their clients. If you have some administrative processes that require round the clock service they will be able to effectively handle that without making much change to their process. This will mean the tasks get done by professionals faster, and typically more accurately, than they would if you hired a team in house to handle it.
With the outsourcing companies being flexible, you are able to choose to contract them to handle all of your administrative tasks or just some of them. You could even add on tasks as needed when they come up. Some companies will customize the services they offer to help you be more efficient so if a task comes up that you would rather outsource then handle it in house, ask your outsource team manager if they can handle it. You will be surprised how flexible they could be.
Increase efficiency: When you outsource your administration services you are able to have an entire team working for you 24/7 if needed to handle your processes quickly. They would already be fully trained, experienced and skilled to perform the exact task you are hiring them for so it’s done correctly the first time without you needing to oversee the process. This would quickly streamline your processes to be most efficient with very little effort on your end.
Cons for outsourcing administrative services:
Lack of control:You will give your outsource team initial direction on what you need them to handle and how you want it completed but really after that they take over so you are giving up some control. This may be uncomfortable for you at first, especially if you are a control freak, but trust they are professionals and experts in the task at hand.
Quality:One thing you never want to do is trade quality for low price. The lowest cost option isn’t always the best and could cost you a lot of time and money in the long run fixing errors and problems that arise. When you outsource it is super important to ensure you are hiring a company that provides high quality service since you won’t be there to oversee the day to day work.
Communication:Communication could be one of the biggest cons to outsourcing. If you are working with a company overseas there most likely will be a pretty big time difference between you and them. You want to find out what their working hours are, including the working hours of the supervisor that will be overseeing your processes. Ensuring you get the best contact times and methods will help with a smoother working relationship.
There may also be language barriers, so going with a company that their staff speaks fluent English will make it much easier to work with them. If they don’t speak or understand English clearly they could potentially not fully understand your wants and needs and you may not be happy with the output.
Lack of industry knowledge:When you outsource your administrative processes you are contracting another company to handle tasks for your business that may not know anything about your industry. If they speak with your customers, it will not look good for your business if they are not knowledgeable and able to answer questions correctly.
When you hire an outsourcing company to handle your administrative tasks be sure to give them a ton of data on your industry, your business and your processes so they completely understand how you operate and are able to successfully complete all tasks.
There are many benefits of outsourcing your administration services but there are some cons to look out for to ensure a smooth process and an excellent output. Go for a provider who is an expert in administration processes and offers a lot of flexibility to fit all of your needs. If you need 24/7 service through multiple channels ensure it is something they are able to fulfil. Make sure they are able to handle the volume of your needs as well.
Hiring the right company is vital for the success of your administration services. When interviewing vendors ensure they speak fluent English, show genuine interest in your business and needs. Having a similar company culture will make it easier to grow a great long-term working relationship with them. You will be communicating with them often so they will feel like part of your team and should be treated as so.
Are you ready to jump on the bandwagon and reap the many awesome benefits to outsourcing your administration services? Contact Awesome CX today!