Measuring the Costs of Outsourcing

On February 22, 2012, in Outsourcing, by Business Development Group
Analyze your business’ financial report in context with the competition while measuring the costs of outsourcing. Establishments that are in a highly competitive industry need to consider outsourcing to remain strong, while dominant companies can afford to stand pat over the short term.

Analyze your business’ financial report in context with the competition while measuring the costs of outsourcing. Establishments that are in a highly competitive industry need to consider outsourcing to remain strong, while dominant companies can afford to stand pat over the short term.

Your goal of expanding your business through outsourcing needs to be tempered by a calculation of outsourcing costs. There is a number of ways to save your costs in outsourcing labor but initial costs for foreign expansion can be considerable. You also need to measure personnel costs and public relations of outsourcing before initiating your business plan.

Calculate

Study total profits over the last 5 years in measuring the necessity for outsourcing. Your goal should remain on drastic decreases in profit after taxes and a comparable increase in business expenditures.

Read related article: BPO Real Time Outsourcing Customer Engagement – Giving your Customers More!

Consider

Analyze your business’ financial report in context with the competition while measuring the costs of outsourcing. Establishments that are in a highly competitive industry need to consider outsourcing to remain strong, while dominant companies can afford to stand pat over the short term.

Read related article: How to Successfully Transition to Outsourcing

Detail

Study rental agreements, business mortgages and other facility documents in determining potential savings through outsourcing. A barrier to outsourcing into new regions is the initial cost of new offices and factories. Your business may be able to sell off older properties and find lower-rent offices miles away from current locations to save money.

Read related articleOutsourcing Services Effectively

Analyze

Look into equipment costs at all levels of your company to measure the costs of outsourcing. Your establishment may need the current machines in your factory, but you may be able to sell or transfer computers, desks and office supplies to save money while you outsource.

Read related article: Call Center as a Marketing Channel

Consolidate

Peek into fuel reimbursement, bonus programs, and other fringe benefits to present staff members. Your expansion into new markets and restructuring of current facilities may lead to high costs accrued by a motivated work force.

Read related article: Philippine Outsourcing: What is a BPO Virtual Captive?

Implement

Work with your managers and accountants in determining the exact number of man hours required for production processes. Eliminating positions and outsource production work to cheaper markets after determining the necessary amount of work required.

Read related article: Steps to take before Outsourcing

Assess

Simply compare the benefits, wages and overall costs of your staff and potential employees in other markets. Your goal to outsource positions may be reinforced by replacing a current worker with a hypothetical worker.

Read related article:Business Outsourcing: Top 5 Reasons Why the Philippines

Grow

Present all the possibility of outsourcing to investors and middle management in determining their interest. All the more, it is important to use every bit of feedback before making a final decision.

          Read related article:Knowledge Process Outsourcing

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