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Outsource! It’s a Wise Move

Apr 20th 2011 at 2:30 AM

A major goal of any company is to keep costs down while delivering top-quality products and services to customers. But with the present financial crisis, this is easier said than done. Inflation and the need to increase the salaries of employees leave businesses no choice but to increase their expenses, which could severely dent their budget.

That is why to remain competitive despite the crisis, many businesses have now decided to transfer some of their operations in other countries—operations such as customer service, technical support, IT support, legal service, and even back-end operations. This move/strategy is called outsourcing, which refers to subcontracting services to a third party. It has become one of the fastest industries in the world.

Advantages of Outsourcing

Companies ranging from home business to multinational corporations enjoy a lot of benefits from outsourcing. Some of these include

1. Cost savings – by outsourcing some of their operations, businesses lessen the cost of paying regular employees or buying the needed facilities and equipment for the task. This is true especially when outsourcing services to lower-cost economies.

2. Cost restructuring – outsourcing allows businesses to make variable costs easier to forecast

3. Focus on Core Business – a company can spare the bulk of its investment, people, time, and efforts in developing its core business instead of concentrating on operations that support the core business.

4. Knowledge – a business gets access to intellectual property plus the opportunity to expand its experience.

5. Contract – the services that are offered can be incorporated with a legally binding contract with legal redress and financial penalties. This cannot be done with internal services.

6. Operational expertise – a company can have access to certain operations that would be too time-consuming, difficult, consume too much effort and resources to develop in-house.

7. Pool of Talents – a company can take advantage of a sustainable source of skills for its needs. Again, if done in-house, finding talents could be time-consuming or could cost a lot in terms of money and resources.

8. Improved capacity for innovation – a business can increase third parties to supplement their limited in-house capacity for product innovation. In the same way, the supplier can learn from the company. It is a mutually beneficial deal.

9. Reduced time to market – the accelerated development of the product or service through the additional capability of a third-party supplier makes it faster for the company to market and deliver its product and services to its customer.

10. Tax benefit – countries where the company outsources its operations to usually offer tax incentives that would save the business a lot of money.

11. Continuous support – outsourcing solves the problem created by time differences. With outsourcing, a company can have a 24/7 operation.

12. Catalyst for economic change – companies that are outsourcing can continue or even improve their operation while saving money in the long run. Third-party providers can employ more people, helping the nation’s economy.

Cebu, the Tiny Outsourcing Giant

Cebu, a sunny island in the Philippines, is one of the best placed in the world for outsourcing business operations. In fact already in 2009, Tholons, an international consulting firm, labeled Cebu as the number 1 emerging global outsourcing destination of the year. A year later, Cebu established its name as a true business process outsourcing (BPO) hub in Asia as the city entered into the family of top 10 global outsourcing destinations, landing neatly in the number 9 place. Large firms such as JP Morgan Chase, Bombardier, and a host of other multinationals have set up their branches here.

Why outsource in Cebu? Companies found out the answers: high literacy rate of the locals; graduates that are highly employable and competent; robust IT infrastructure, easy and smooth cultural adaptability of the Cebuanos to their foreigner employers; an abundance of highly skilled professionals in many fields; lots of places and opportunities to optimize leisure and work balance; affordable cost of living; and a plethora of world-class leisure, F&B, recreation, and shopping facilities.

In short, Cebu has everything and more.

A Business Consultancy, IT Solutions Provider for SMEs

One of the companies who made the move to be a Cebu-based service provider is AAA Commercial Brokers and Consultancy Inc. (AAACBC), a business consultancy and Web and IT development company that focuses in providing its services to small- to medium-scale businesses (SMEs).

“We have had a significant rise in queries since the last quarter of 2010,” said Michael Nilles, CEO of AAACBC. “While we have closed contracts from these queries, we have expanded our Web development and IT team to be ready with immediately serving new clients we expect to get soon.”

Nilles said that American firms (and other Western companies elsewhere) first want to cut costs to keep their bottom line as they ride through the crisis. They have seen the need to outsource to a team that can provide them reliable service and whom they can trust and build a harmonious relationship with. Following some ethical issues and personnel attrition problems over the past 2 years in India, these companies have increasingly been sending IT work to hubs in Southeast Asia, more particularly, in Cebu.

“They want dedicated to handle their IT requirements for consistency and, more importantly, with loyalty,” he explained.

AAACBC prides itself for having highly proficient IT specialists who graduated top of the class from leading Philippine universities. Nilles even said that their skills can equal or even surpass their counterparts in the US and leading western countries. The AAACBC team can deliver world class IT services such as software development, network development, PHP and ASP programming, graphic design, Web development, and systems administration. Specialists also handle data management, Internet marketing, online promotion, search engine optimization, social media marketing, and other services.

Other services offered by AAACBC includes business development, marketing, corporate communication, translation services, training and professional development, financial management, and global training.

“By outsourcing to us, you’ll hire our experts to be at work in your business,” Nilles assured. “This will allow you to hire new employees with better flexibility.”

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