Reasons Why Most Fortune 500 Companies Outsource Non-Core Functions


To outsource, businesses must adopt proactive strategies. Companies have always outsourced non-core functions for a very long time. The use of recruitment and marketing agencies for example, is a form of outsourcing that has been around for long. However, with increased access to modern technologies the cheap labor net has been cast even wider, with the global marketplace being another addition to the basket of exciting business alternatives and choices, thanks to affordable offshore outsourcing services.

Small and medium businesses can now join their Fortune 500 companies and outsource from the global marketplace. The paradigm shift from just outsourcing to real-time off shoring of non-core business functions has brought unprecedented benefits to small and large businesses alike. Here are the main reasons why most Fortune 500 companies outsource non-core functions and why your business should be in the same bandwagon.

  1. Lower labor and operational costs. The global marketplace is highly competitive and full of choices. If you are looking for a chance to lower operational and labor costs, you need to outsource to affordable but highly skilled professionals. Lowering expenses is a guarantee to increased net revenue. Your business will also have a chance to expand exponentially while reducing capital outgoings. Is your business aimed at making impacts and profits by cutting costs? It is all about saving money, off shoring being one of the best ways towards this objective.
  2. Positive research data supporting outsourcing as a viable business model. Research has shown that companies that outsource outsmart their peers in a number of important business metrics. According to recent research, companies that outsourced were able to reduce the rate of their annual Selling, General and Administrative (SG&A) costs by 3.5 points in the first year of the [outsourcing] engagement. These astute companies were also able to increase the rate of their annual earnings growth by 4.5 points in the second year of the engagement. Outsourcing has also been attributed to increased efficiency and speed of delivery of services and business products (IBM survey, 2010).
  3. A chance to tap into the global knowledgebase and technology. In addition to improving workload efficiency and reducing expenses, outsourcing opens your business to new capabilities, new ideas, knowledge and expertise beyond its earlier confinements. It also provides an avenue for new insights and innovations. This equips your enterprise with renewed agility to implement new business models in the emerging global marketplace while doing away with those ones that time and technology has rendered obsolete. This is a perfect chance for even the small businesses to assume a global outlook in structure and operations. The SMEs and Fortune 500 companies will in this way get more time for their core functions while retaining the global presence that every business desires.
  4. Peace of Mind. Every business manager knows the intricacies of risk management, workplace regulations, employee statutory regulations and the perks associated with the general HR and other Departments. With outsourcing, the business manager gets peace of mind knowing that many risks have been taken care of by the outsourcing service partner. Issues such as health insurance covers, retirement benefits, paid holidays and times-off, losses occasioned by employees’ lateness or absence, supervision, as well as many other employee-related eventualities and issues are shielded from affecting your business’ productivity by the outsourcing service provider.

It is however good to note that outsourcing models of the past years is now over. The current outsourcing model involves high-tech communication systems where you interview and hire your virtual employee. In this way, you choose and virtually supervise your preferred employee who will work for you in your outsourced virtual office. Your outsourcing partner provides your virtual employee with everything that is needed for complete and high-level performance just like it would have been the case in your own workplace. Get the best outsourcing services provider and offshore virtual employees from your outsourcing partner today. If you are looking for a virtual employee in a virtual office for a fraction of cost, contact Virtualskillset.com now for a free quote.

Virtualskillset Inc. is the fastest growing provider of affordable outsourcing services. Based in the USA, we serve clients from all continents. Our virtual employees are based in the US. Others are in Asia, Africa and other continents with affordable and easily available manpower. We provide the much needed workforce for non-core functions of both young and established businesses.

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