Businesses operating in the 21st century have an immense amount of pressure to be dynamic, relevant and constantly find ways of growing. One of the most common tools used by organisations to gain leverage over their competitors and exceed the aggressive demands of the market is to employ outsourcing, says Director of Malander Group, Lyle Malander.
“Outsourcing as a tool is not new. It has been around for thousands of years. But it is only recently that companies are beginning to understand the power of having external expert knowledge and reviews to positively grow their businesses. Outsourcing is a process in which an external consultant or another business is employed to take care of certain tasks and processes, instead of hiring additional employees and assigning tasks to other staff. Simply put, it is outside resourcing,” Malander explains.
He says outsourcing has various benefits for businesses, which include cost savings, quality and efficiency improvements, as well as increased customer satisfaction. Importantly, outsourcing of non-core businesses mitigates elements of risk, while freeing up time and resources for a company, allowing it to focus on its core functions like production, sales and business expansion. These are critical success factors that aid the growth and profitability of any business.
“Outsourcing a department or function allows you to gain access to a larger pool of resources and expertise, as they ensure the smooth running of that function. Your organisation also gains a competitive edge in the market. Through strategic outsourcing to an outsourcing partner, such as the Malander Group, you can expect the best financial, digital and talent acquisition services. This opens up your business to higher productivity and allows you to manage your in-house resources judiciously, whilst decreasing the management burden,” says Malander.
However, outsourcing of services also comes with certain cons, Malander says.
When a company outsources certain services, it gives third parties access to insider information. There may also be the element of inconsistent business culture between the two parties. Businesses using outsource partners have to rely on external service providers, this could dilute the business standards and take away the control of functions and deliverables from the business.
“The key is to find a service provider that takes the time to really understand your business and agrees to procedures that will ensure both parties are comfortable and no one is kept out of the loop,” explains Malander.
The Malander Group has a core focus of providing Finance, Human Capital and Information Technology solutions to a variety of clients. With a vested interest in their clients’ business to understand the challenges they face and identify ways to provide a value-added service.
A McKinsey report stated that the Services Sector constitutes 70% of Gross Domestic Product (GDP) globally and 62% in South Africa. Between 2004 and 2014, they contributed four-fifths of South Africa’s GDP growth and nearly nine-tenths of new job creation, adding R500 billion to the country’s GDP and 2.7 million in its employed workforce.
“Outsourcing done right with a credible partner has great benefits for the business. It creates access to a bigger resource pool of specialised skills for instances such as special once-off projects, whilst saving costs for non-routine functions. Outsourcing also aids in providing rapid growth for the business and reduces human resource administration, which is great when an organisation does not need full-time staff. Outsourcing allows the company to focus on its core business, foster growth and remain competitive in a fast-paced market,” Malander concludes.