Strategies to minimise your operational costs and maximise the benefits of offshoring
Have you looked at your company’s accounting and finance documents recently? Did you notice any parts of your business that are costing too much? Well, if you are seeing costly items then it’s time to make them priorities in reducing your overheads.
Nowadays, many businesses considering offshoring to be one of the best strategies to not only minimise their operational costs but also to help their business become more productive and boost its growth.
Instead of worrying about your high operational costs, here are 5 strategies you can employ to minimise your operational costs and maximise the benefits of offshoring:
1. Reduce overheads to reinvest
Many businesses who offshore see their employee costs come down by more than 70%. For example, if you hire an IT employee locally, it will cost you around $250,000. However, by offshoring the role, the cost is reduced to $60,000. Your business can then either employ additional IT staff or you can use this saved expense to develop other areas of the company. This strategy may result in you being able to complete more work and attract higher-paying clients, as your business will be able to meet heightened client demands that require more experienced staff.
2. Cutting the time devoted to lower-value activities
By offshoring, you can reduce the amount of time that you or other employees spend on lower-value activities. This approach then frees up your time so you can focus on revenue-raising work. Typically, by trimming the amount of time devoted to lower-value activities we have seen clients such as insurance brokers and accountants increase their revenue by > 30% and significantly improve their customers’ experience.
3. Improving business output
Offshoring allows you to streamline processes and improve how you do business, and it also gives you more time to devote to your clients. This strategy delivers extra time for you to spend building your business, as you are no longer stuck on administration duties. But you will only enjoy this outcome if you partner with the right offshoring company.
4. Cost focused
When a business thinks only of cutting costs when offshoring, they are missing out because they’re not looking at the bigger picture or the alternatives. By taking this approach, they can not only end up costing themselves more in the long run, but they can also erode staff and client confidence, end up with disgruntled workers, and produce work that has errors, doesn’t comply with standards or is inconsistent.
5. Build a succession plan
It is advisable to start with a plan that defines how you’re going to implement changes and transition your business and staff through the offshoring process. Your plan should include staffing changes—which roles you’re offshoring, who you’re moving and where you’re moving them to, and who you’re making redundant—and how you’re going to reduce the impact on these people.
Offshoring is far more than just a cost-saver for business. By exploring how your business functions, what roles your staff are performing and how they are utilising their time you gain a better understanding of your business and how it operates. Plus, this approach allows you to ask your staff what they think of their workload, and whether improvements are needed.
Often when offshoring, business owners are advised to look at making slight changes to their business, rather than rushing in and making too many changes at once, which can unsettle staff and reduce business growth. If you have any questions, please feel free to get in touch with me at Intogreat.