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8 Things to Look Out For When Comparing Quotes from Outsourcing Companies
Before selecting an outsourcing company, there are a lot of factors to keep an eye out for. The success of an organization depends on how important it is to consider these factors before outsourcing. You must understand your needs to decide whether outsourcing is the best option for you. You want to ensure that your needs are addressed when evaluating outsourcing quotes.
It would be best if you based your decision on which one offers the finest customer service. A distinguished company will take pride in giving exceptional customer service.
Any additions or modifications will impact the final cost. You should also investigate each company’s qualifications and experience. Finally, to identify the best choice for your needs, ensure the quotation is comparable with other potential outsourcing companies.
These considerations will help you compare outsourcing quotes and find the most appropriate for your business.
This article will discuss why businesses outsource their tasks and what factors you should consider when comparing outsourcing quotations.
Why do Businesses Outsource?
Many companies outsource because they lack the time, money, or knowledge to handle everything themselves. Through outsourcing, a business may concentrate on what it does best and assign the rest to others. Also, this may be a great approach to gaining exposure through partners who may later develop into reliable clients.
Do you want to know more about the benefits of outsourcing and why businesses make it a part of their strategy? We will examine some general outsourcing statistics below.
Source: Magellan Solutions
- In 2023, global outsourcing spending may reach US$731 billion, according to Deloitte’s Outsourcing and Shared Services 2019-2023 Report.
Around US$700 billion was spent by corporations on outsourcing in total in 2022. In 2023, spending on IT outsourcing is projected to increase by 22% to US$519 billion. Spending on business process outsourcing (BPO) is anticipated to reach US$212 billion in 2023, up 19% from 2019.
- Based on Deloitte’s Global Outsourcing Survey, 65% of the respondents answered that “maintaining focus on core tasks” is the most common benefit of outsourcing. The majority of respondents cited cost reduction as the primary advantage of outsourcing.
- As stated in the 2019 ISG Momentum® Market Trends & Insights Geography Report, more than 90% of the top 2000 global corporations have arrangements for IT outsourcing in 2019. Less than three-fifths of the G2000 companies have a contract for business process outsourcing, making it less widely used than IT services.
- “Increased efficiency” was cited as the primary reason for outsourcing by 24% of Clutch surveyed small businesses.
Other key reasons why small businesses outsource:
- Increased pool of knowledge (18%)
- Flexibility (16%)
- Focus on core competencies (15%)
- 37% of small businesses outsource IT and accounting services.
Other everyday tasks outsourced by small businesses:
- Digital Marketing (34%)
- Development (28%)
- Customer Service (24%)
- Human Resources (24%)
- By 2030, it is anticipated that the market for business process outsourcing will be worth US$525 billion, as demonstrated in Grandview Research. The growth rate of business process outsourcing is predicted to be higher than 9% each year until 2030. Such development is anticipated to be primarily driven by the financial services, IT, and telecommunications sectors.
- According to the IT and Business Process Association of the Philippines (IBPAP), business process outsourcing accounts for 7% of the Philippines’ Gross Domestic Product (GDP). With nearly 1.44 million full-time employees, the industry generated US$29.1 billion in revenue in just the first half of 2022.
These figures resulted from the growth of e-commerce, financial technology, health care, and technology, as well as the pent-up demand from international clients and increased confidence in work-from-home arrangements.
- As reported by Statista, around US$175 billion was spent on service outsourcing in China last 2020. Its market value in 2016 was US$106.46 billion, which represents a growth of 65%.
- Based on YouGov’s 2019 Research, 70% of B2B businesses in the United Kingdom outsource crucial business functions.
Critical outsourced services in the UK:
- Information Technology (IT) Support (34%)
- Payroll (28%)
- Printing (24%)
- Accounting (24%)
8 Things to Look Out for When Comparing Outsourcing Quotes
Many businesses have hailed outsourcing because of its advantages. Among the benefits of outsourcing include: saved time, reduced costs, focus on core tasks, increased productivity, and access to resources and skills.
Defining outsourcing goals is a crucial component of the success of the project. To ensure a successful outsourcing partnership, there are some aspects you need to look at.
Below are vital factors when choosing an outsourcing partner for your business goals.
Source: Magellan Solutions
1. IT Assistance
The efficiency of a company also depends on both infrastructure and technology assistance. It would be best to evaluate an outsourcing vendor by determining who has the tools and capabilities to carry out your company’s operations quickly. Make sure that your potential outsourcing provider is using advanced technologies. This enables progress and effective project management.
2. Pricing & Reduced Costs
By lowering operating expenses, outsourcing can make your business more profitable. To assess whether outsourcing is financially beneficial, you should determine whether it will reduce costs. It is crucial to evaluate the services provided by the outsourcing vendor to guarantee that your business will benefit from it.
When comparing prices from different outsourcing vendors, you must go with a reputable company offering a reasonable cost of quality services. Do not just hire an outsourcing vendor that offers the cheapest alternative because there might be a chance that it cannot deliver the results you need for your business.
3. Knowledge of the Outsourcing Company
A potential outsourcing partner’s experience and portfolio should be examined. By confirming that your objectives align with the vendor’s processes and services, you will discover how the outsourcing company runs its operations and stays up with trends.
However, a business that has already proven its expertise in the specific service you need might charge more but will usually produce superior results.
4. Top-notch Talent
An effective outsourcing company has experts qualified to produce optimal results. Choose a BPO company that can supply employees with skills that meet your expectations. Managing the projects will be simpler because you have a dedicated outsourcing team.
5. Develop Your Strategies
For a project to be successful, roles and outcomes must be clearly defined. It is crucial to establish objectives and standards. It will be difficult for you to demonstrate the worth of the hired assistant without them.
Having an established plan for the outsourced staff will prevent miscommunication. As a result, when outsourcing services, you may expect a high return on investment (ROI).
6. Service Level Agreement (SLA)
You and your outsourcing partner will enter an SLA specifying the standards and services you anticipate from your provider. Please make sure the terms and conditions of your SLA are precise before you sign it. It is advisable to consult a legal expert for advice if you are unsure of the details of your SLA.
You would likely benefit from a confidentiality clause in your SLA regarding privacy and safety measures. Establishing rules on confidentiality helps ensure that the contractor does not misuse your company’s information.
Communication is a vital component of any relationship. If you work with an offshore team in a different time zone, ensure your vendor can respond to concerns or queries immediately. The vendor must have excellent communication skills to comprehend and meet your business requirements.
8. Complying with Deadlines
In addition to cost, timeliness is a crucial consideration. Deadlines that the vendor misses may cause significant delays for you. Before signing a contract, determine the vendor’s quality assurance procedures and contingency plans for missed deadlines.
On a Final Note…
Flexible and affordable solutions are provided through outsourcing services. Before choosing, there are a few factors to consider based on the kind of outsourcing services offered. Companies nowadays are cautious about comparing outsourcing quotes.
A company’s talents, expertise, and reputation in the field should all be considered when comparing outsourcing quotes. Aside from those mentioned above, it’s also essential to consider the work’s location, duration, and volume. Upon noting these factors, you will guarantee that your business is in good hands.
Magellan Solutions Provides Outstanding Outsourcing Services
Magellan Solutions will give you top-notch outsourcing services because we value your business. We will do everything we can to earn your satisfaction with our work while maintaining a reasonable price.
As a leading provider of call center services for over a decade, we pride ourselves on offering only the highest quality outsourcing services. On top of that, we are an ISO-certified and HIPAA-compliant outsourcing company. We provide a great variety of quality outsourced business solutions.
Give us a call, and let us discuss your business goals.