Outsourcing is one of the reasons big tech companies are successful. Microsoft, Amazon, and Facebook are some names that depend on service providers and business process outsourcing (BPO) companies to improve revenue.
Even Twitter, which has undergone mass layoffs since Elon Musk bought it, relies on outsourcing. It has terminated around 4,400 employees to reduce costs as the company reportedly loses $4 million daily.
The cuts in contract workers were part of Twitter’s “savings exercise,” according to a company email sent to contractors.
Below are the five common tasks that tech companies outsource to help them succeed.
1. Technical Support
Tech support outsourcing, also known as help desk or information technology (IT) outsourcing, lets BPO companies and third-party service providers manage a company’s IT processes.
Tech companies outsource IT processes ranging from basic ones such as computer system troubleshooting and maintenance to complex ones, including network management and organization-wide system deployment.
The benefits of outsourcing tech support:
- Available next-generation technologies. Established service providers leverage cloud-powered technologies to integrate all applications and streamline workflow. The latest tools enhance consumer service quality and employee performance.
- Accessible work-from-home (WFH) employees. The WFH arrangement enables the third-party IT team to address customer or client issues faster than on-site tech professionals. Remote workers are not required to travel, a time-consuming activity, especially during heavy road traffic.
- Scalability. A tech company experiencing a business downturn can reduce operating costs by downsizing without terminating full-time employees. Similarly, it can increase third-party employees when business is bustling. A service provider takes care of the workforce supply.
2. Data Entry
Data entry outsourcing allows a tech company to subcontract encoding-related operations to a third-party vendor. Data entry specialists input information in words or numbers.
Outsourced data entry services include word processing, proofreading, online form billing, payroll data entry, captioning, microdata entry, email processing, information transferring, medical transcription, and data cleaning.
The benefits of outsourcing data entry:
- Lower business expenses. A tech company delegating data entry tasks saves on infrastructure and overhead expenditures. It does not need to invest in human resources and technology to process and supervise data.
- High-quality services. BPO providers have skilled professionals with extensive experience in different data-entry tasks. These third-party specialists are detailed and precise. They adhere to best practices to eliminate inaccuracies, delays, and data loss.
- Information security. Service providers have proven in-house policies and regulations ensuring full data safety. They provide their clients with a non-disclosure agreement guaranteeing all information handled is confidential and private.
- Customer Service
Customer service outsourcing is when a tech company recruits a service provider to oversee customer-related activities.
Outsourced customer service agents help customers with orders and purchasing decisions, suggesting which product or service to buy. They also address consumer questions and complaints to provide the best possible satisfaction and experience.
The benefits of outsourcing customer service:
- Higher customer retention. Consumer loyalty is vital to keeping a healthy cash flow because it translates to repeat business. Maintaining a loyal customer base is more profitable than generating new ones. An outsourced customer service team is skilled in retaining current buyers.
- Advanced customer service systems. BPO companies invest in technologies that improve customer service. These include customer relationship management software, data warehousing, and enterprise resource planning networks. Such applications can take customer service to a higher level.
- Heightened buyer satisfaction. A BPO provider specializes in customer service. Its primary responsibility is to improve a normal or above-average consumer experience.
- Accounting and Bookkeeping
Accounting and bookkeeping outsourcing permits a third-party specialist to handle a tech company’s books and taxes for an agreed-upon service fee and time.
Third-party specialists take care of the processes, including management accounting, payroll, accounts receivable, auditing, tax, accounts payable, financial reports, payment collection, and other similar activities.
The benefits of outsourcing accounting and bookkeeping:
- More time for the core business. Bookkeeping and accounting are tedious and lengthy activities. The service provider’s team is competent to take on these. Outsourcing frees some of the tech company’s resources for more crucial projects.
- Minimized fraud. In-house accounting and bookkeeping activities are susceptible to fraud or malpractices such as “cooking” the books and fabricating account expenses. A BPO provider is an independent partner that can transparently and closely monitor transaction reports and processes.
- Higher information privacy and security. In-house bookkeepers or accountants could compromise a company’s financial records. A service provider upholds its agreement with clients to retain reputation and sustainability.
- Human Resources (HR)
Human resources outsourcing involves a tech company enlisting BPO services to address its HR operations, either partially or entirely.
Applicant screening and tracking, hiring, training, payroll and compensation processing, employment evaluation, performance appraisal, and staff pensions are among the HR functions delegated to a service provider.
The benefits of outsourcing human resources:
- Regulatory risk reduction. HR operations comprise complicated legal paperwork that might lead to fines or lawsuits if managed improperly. Service providers have HR experts who can track and simplify processes for better compliance with laws and standards.
- Time-saving. The paperwork, duties, and other tasks entailing HR are burdensome. Screening and interviewing job candidates, onboarding and training new hires, and processing payroll are extensive. Outsourcing these operations saves time.
- Cost reduction. Running an in-house personnel department increases operating expenses such as salaries, benefits, taxes, insurance, and similar compensations. Adding to these are office costs, including extra workspace, computers, office supplies, and other equipment.
Outsourcing these processes enables a tech company to save on resources and seek expert assistance. The business strategy also empowers a digital organization to focus on its core competencies while enjoying first-rate services at reasonable costs.
But outsourcing might become an unfavorable effort if planned and implemented improperly. Before deciding, companies must also consider its potential drawbacks, including the adverse effect on in-house staff morale, the loss of internal management control, and hidden or unforeseen costs.
Working with offshoring and BPO companies is recommended. These organizations can help businesses outsource their processes successfully.
Rene Mallari is a B2B content writer for Unity Communications, an Arizona-based Inc. 5000 company specializing in outsourcing and offshoring services.