Effective Outsourcing Strategies for Cost Efficiency

The world economy is currently experiencing a slump. Now more than ever, businesses are trying to find ways to increase their revenue and decrease their expenses as much as they can. One of the solutions that many are turning to is outsourcing. Thus, companies are looking for effective outsourcing strategies to increase their operational efficiency.


Outsourcing is the practice of hiring external parties to perform services and operations more efficiently. By applying effective outsourcing strategies, you are able to cut costs and increase revenue.


Firstly, what are the benefits of outsourcing? Secondly, what outsourcing strategies should you apply to increase revenue and decrease expenses?

The Benefits of Using Outsourcing

Outsourcing is not a new practice but it has gained popularity in recent times. Businesses opt for outsourcing to increase their operational efficiency. This leads to an improved competitive advantage. By streamlining your production process, your operations become more efficient. An outsourcing strategy defines what can be outsourced to increase productivity and efficiency.


Here are a few benefits of using outsourcing strategies:

Gaining Access to Skilled Experts

Outsourcing provides you access to skilled people at a fraction of the cost. By allocating tasks to these outsourced workers, you have more time to focus on the core mission without having to supervise them.  

Focusing on Your Primary Business Activities

There are secondary functions that can detract attention and resources from your primary work. By outsourcing, you have the ability to delegate these functions to a third-party. Their primary business activity is dealing with the outsourced function.

Improved Risk Management 

By outsourcing, you are able to share risks with your outsourcing partner. Tasks get done well the first time around. 

Operating Your Business Around the Clock

More often than not, companies outsource to third parties located in different time zones. This means that, when your employees go home, your outsourcing partner continues with your operations. In fact, with these extended operation hours,  your clients can experience 24-hour service.  

Shorter Turnaround Times

Your outsourcing partner is skilled in their respective field. This means you will be able to get deliverables to your clients faster. Customers love fast, high-quality service and outsourcing allow you to give them exactly that. 

Using Outsourcing Strategies is Cheaper

By outsourcing, you have the ability to convert fixed costs into variable costs. This is because you no longer have to pay for staff housed in your company full-time.  In some cases, the actual cost of labour is cheaper. We strive to provide low-cost services to our clients at Noon Dalton.

Increasing Your Competitive Advantage

By operating your company efficiently, you are able to provide your clients with the best possible service. This gives you a competitive advantage over your industry rivals. As a result, you have the ability to increase your productivity and manage your resources efficiently at a fraction of the cost. All these benefits accrue to your clients in the long run.


Outsourcing has many benefits, not only for you but for your clients too. What outsourcing strategies can you apply to your operations to decrease expenses and increase top-line revenue? How do these outsourcing strategies work? Which outsourcing strategies are right for you?

Practical Outsourcing Strategies for Your Business

Regardless of the size of your company, cost reduction is always welcome. Cutting down on costs isn’t always an easy thing to do. But ultimately, if done correctly, you are able to increase your top-line revenue. Firstly, one of the most convenient ways to reduce your costs is by applying outsourcing strategies to your operations. Here are four outsourcing strategies that increase your operational efficiency and save you money, too.

Comprehensive Business Process Outsourcing (BPO)

This is one of the most complex outsourcing strategies. A comprehensive BPO is a long term engagement with a third party to manage a broad set of processes across many areas in your organization. Both parties commit to contributing resources to the operations over the agreed period. Even though this strategy is comprehensive, you will still have to manage some operations.


Comprehensive BPOs consist of many contracts, including:

  • Master service agreement (MSA)
  • Multiple service level agreements (SLA)
  • Statements of work (SOW)

Selective BPO

This strategy is also complex but less integrated than comprehensive BPOs. With selective BPOs, you are responsible for training a third-party team. They manage many processes in one functional area of your business. For example, you could hire an external service provider to design a process for your operations. But, they would not be in charge of implementing the process themselves.


Selective BPOs are also governed by MSA, SLA, and SOW contracts. But, they are less complicated than the contracts used for comprehensive BPOs.

Licensing Agreement

Of the available outsourcing strategies, licensing agreements are used to source tangible assets. Examples of these assets can include software applications and real estate. Licensing agreements are usually taken on for many years and allow you to pay for the costs over longer time periods. If the costs are low, the payments usually occur on a month-to-month basis.


Licensing agreements for technologically-related assets are “Software as a Service” (SaaS) contracts. They have well-defined purchase order terms with specified unit prices per time period.


This BPO is often referred to as “labour for hire” and is the least complex of the outsourcing strategies. With this type of BPO, you pay for a contractor to work on a task for a set amount of time.


This is used when you want to limit the complexity of your engagement and the length of time required for the deliverable. Thus, it is the most flexible and least risky way to manage your relationships with your external service provider. It’s one of the most cost-effective outsourcing strategies that you can use.


Contracting uses purchase orders with well-defined terms about specific deliverables. These prices can be determined per unit time or project term.


Thus, by applying one or more of these outsourcing strategies, you can streamline your operations. These are a few functions that you can outsource when deciding which types of outsourcing strategies to use:

Outsource Your Bookkeeping Function

Bookkeeping is a key function of your business. Consequently, mistakes in this department cost your company a fortune. You can mitigate this risk by outsourcing this function to another company. 


The risk of mistakes is also reduced because the company would specialize in offering this service. If mistakes are made, the legal and monetary consequences would fall onto the outsourced service provider. 

Outsource Your PR and Marketing Functions

One of the ways to attract clients is through your brand power and how well you market yourself. There are firms whose sole purpose is to work on your marketing strategy and improve your media presence.


By using this as part of your outsourcing strategies, you rely on professionals to grow your customer base. By increasing your customer base, you will maximize your top-line revenue. Your outsourcing partner can increase your interactivity with clients on social media platforms. As a result, you improve your overall customer relations.

Outsourcing Your Call Centre Function

Call centers can be exceedingly expensive to maintain in-house and one of the most commonly used outsourcing strategies. In fact, maintaining a call centre incurs the following costs:

  • Training costs
  • Maintenance of administrative resources
  • Office rent and technical costs
  • Data analysis
  • IT infrastructure costs
  • Employee recruitment costs

By outsourcing your call centre function, these costs are incurred by your outsourcing partner. Above all, this means that you have an even greater reduction in your overheads. 

Outsource Your Production

If you are a business that offers physical products, this is one of the most effective outsourcing strategies that you could apply. The cost of manufacturing in-house is quite high. So, by outsourcing to an external service provider, you achieve the same output levels (or higher) at a fraction of the cost. Thus, issues such as quality control are managed internally by your outsourcing partner. 

Outsource Your HR Processes

In a small business, HR is a manageable task. Once your operations start to expand, HR management becomes a time-consuming process.


By outsourcing HR-related functions, your outsourcing partner incurs the costs of these processes. In other words, your workforce can focus on the functions that generate income. This is one of the many outsourcing strategies that result in visible operational efficiency. 

Outsource Your Software Development Needs

All businesses tend to need software to manage their internal processes as well as improve their customer relations. You could hire a software engineer, but this can prove to be quite expensive and an exhausting process. 


By outsourcing this function, you have access to a team of software engineers who work to design customized solutions for you. Instead of having one software engineer, you have an entire team at a fraction of the cost. 


All of these outsourcing strategies result in increased top-line revenue and decreased expenses. You have the option of applying these solutions in isolation or using more than one of these outsourcing strategies at the same time. The key is finding the right partner for your outsourcing strategies and requirements. 

Noon Dalton: The Perfect Partner for Your Outsourcing Strategies

Our philosophy is simple. We engage with our clients to evaluate, establish, and manage remote teams. Noon Dalton helps to improve processes and increase productivity and profit. Furthermore, create customized outsourcing strategies to fit your business and help you to achieve your desired outcomes.


We constantly upskill our remote teams to ensure that they are on top of their game and ready to provide you with the best possible service. Our remote teams are based in India and the Philippines. Therefore, you have access to large populations of skilled people.


The power of the USD in comparison to their currencies means that labour will cost you less than it would in the United States. The aim for us is to generate value for your company and to keep your operations running, regardless of the state of the economy.


And so, by applying these convenient outsourcing strategies and partnering with Noon Dalton, you can increase your top-line revenue and decrease your expenses with minimal effort.