Outsourcing is commonly associated with companies looking to cut costs in an attempt to stay alive in a competitive business environment.
However, what is perhaps less well understood is that outsourcing can also prove a valuable tool to help an expanding company manage its growth.
In simple terms, outsourcing involves one company paying another entity to carry out a function. For instance, Telstra recently announced it would shift a number of its existing cloud and data analytics positions to IBM in an attempt to boost growth and improve skills and culture.
Most media reports about outsourcing tend to focus on larger corporates offshoring jobs to cut costs. But at the smaller end of the business scale, outsourcing is also gaining traction as more small to medium enterprises (SMEs) look to free up valuable time to spend on business development and growth, while not sacrificing on operational standards.
Modern-day outsourcing provides a range of business solutions including, back-office processes, contact centre services, and digital creative and development services.
Benefits of outsourcing
While many outsourcing players focus on the big end of town, there are those that help SME customers grow their companies quickly by moving core and non-core activities offshore.
That means domestic employees can focus on growth. The outsourcing partner manages all assets and support services, allowing firms to prioritise things that help their business grow. That also means cost savings from shifting operations to a lower cost labour market overseas can also be allocated to sales and marketing to further boost business development.
Another plus is that, as an Australian business grows, the outsourcing partner can scale along with it. This enables domestic firms to meet changing demands like the need for extra headcount.
Outsourcing overseas also has added cost-saving benefits. In the Philippines, for example, salaries are around 70% less than in the Australia. Plus, companies that outsource benefit from reducing overheads by more than 50% by using their partner’s office space, assets, and support services.
How it works
Understandably, SMEs can be concerned about outsourcing. They can be worried about losing control of business operations, falling into non-compliance with local legislation, and below-par work standards.
Salmat’s own MicroSourcing employs a unique business model that provides Australian companies with the ability to remain in control of the day-to-day processes while leveraging our local presence and corporate infrastructure in the Philippines. This strikes a middle ground between outsourcing the work to a third-party provider or incorporating their own subsidiary in the foreign country.
MicroSourcing recruits and employs local staff, and provides Australian clients with office space, assets and on the ground support. It uses a collaborative approach that ensures clients have complete control of their operations in the Philippines.
Small business success
Family-owned Australian media company Star News Group has first-hand knowledge of MicroSourcing.
In 2012, the publisher of local newspapers in NSW and Victoria moved its editorial design to the Philippines, hiring a web developer and senior programmer to assist its Australian team. Since then, the company has increased team headcount in Manila to 17 people.
Star News Group Managing Director Paul Thomas says the experience has been positive. He says MicroSourcing has helped the small firm cut costs and boost bottom-line results.
“The staff we have recruited are incredibly respectful and dedicated workers,” Thomas says.
“We’ve taken the time to travel over there to make them feel part of the team … The staff see themselves more as part of Star News Group than part of Microsourcing."
Find out more about Salmat’s Microsourcing service here or call us on 1300 725 628.