The business world is already highly contentious as it is, but it can be even more so during an economic downfall caused by a global pandemic. COVID-19 has impacted businesses all over the world, and although the majority of people are working from home, deadlines must still be met. Since the economy is already seeing a 6.3% fall in projected economic growth, businesses must find ways to overcome these issues. One way the IT industry specifically is fixing this problem is by outsourcing work to offshore companies. Outsourcing is a practice in the business world where services and job functions are given out to third parties. By outsourcing work, companies are able to hand certain work over to companies with experts in that line of work who are readily available. This way, work gets completed faster and more efficiently. In the case of the IT and technology industry, outsourcing has become the backbone of countless organisations in the last few decades and can further help businesses prosper despite this pandemic.
As businesses are adapting in a new and changing environment due to the pandemic, more and more of them have taken the initiative to outsource their work. Outsourcing is more likely than not to see a rise in the demand for it since firms are suffering and at a roadblock when it comes to finding ways to maximize profit with cutting costs. 45% more firms will be outsourcing in the following 18 months and demand for outsourced expertise in cloud computing and infrastructure is estimated to rise by 77%. Technical expertise in security, data analytics, cloud infrastructure, and networking is vital to businesses looking to adapt and overcome the hurdles and uncertainties COVID-19 has thrown their way.
The main aim of any organisation is to maximize profits by minimizing costs. By choosing to outsource work specifically to offshore companies, (for example, a US based company outsourcing work to Pakistan) the difference in the worth and value of the currency plays a huge role as the work can be done for much cheaper by the offshore company rather than by a local one who would be charging higher prices. In other words, by outsourcing work to a low-cost country means that the firm will have access to better quality work for comparatively lower rates.
In terms of financial flexibility, outsourcing work would ensure that work is being carried out even if the main offices are closed due to closures in the country. Additionally, outsourcing work to offshore companies means that most work related activities will still continue, even through governmental implementations, retaining the infrastructure required during the lockdown. It would guarantee sustainability and efficiency by saving both valuable time and money.
When work is being outsourced to offshore companies who are completing it regardless of new stay at home laws, deadlines are met a lot faster and more work is completed. As more work is completed, more profits are earned, leading to the business ending with a better ratio of gross profits to costs and ultimately an overall increased net profit margin. This is because outsourcing offers increased profits as well as higher levels of productivity by eliminating major costs including training, hiring, wages, and employee benefits. Additionally, as a greater number of employees are working from home during the pandemic, output and productivity have increased, meaning more work is being done in the same time frame.
When it comes to outsourcing, companies are able to invest in third parties by paying them a fee which is comparatively cheaper than investing in another employee with a specialization in that certain skill set. Not only is this cost effective, but a step-up as well since they are receiving the work they are looking for at a lower cost range. In other words, outsourcing can be more cost efficient than using in-house skills and personnel.
By outsourcing work, individuals with different skill sets are readily available and companies can grasp the opportunity of working with an outsourcing firm with a wide range of skill sets which may not be directly available to them in their own firm. This ultimately leads to greater knowledge, understanding, and types of work produced, and is a win-win situation for both the company and outsourcing firms due to the mutual benefit.
All in all, tough times like these do not last and sooner or later the economy will run like it used to before COVID-19 hit. However, it is vital for companies to learn how to overcome such obstacles and ensure business continuity rather than succumbing and becoming victim to them. With the help of offshore outsourcing, businesses can still be run remotely and with the help of a wide range of expertise, can ultimately benefit from the expertise and guidance of professionals to achieve lower costs, higher flexibility, and increased work efficiency.