Outsourcing is nothing new. Big corporations has been outsourcing functions that are either non value add to their empoyees or functions that they themselves do not have expertise in.

Outsourcing, the practice of using outside firms to handle work normally performed within a company, is a familiar concept to many entrepreneurs.  Small companies routinely outsource their payroll processing, accounting, distribution, and many other important functions, often because they have no other choice.

But not many businesses thoroughly understand the benefits of outsourcing. It’s true that outsourcing can save money, but that’s not the only or even the most important reason to do it. As many firms discovered during the outsourcing “mania” of the early 1990s, outsourcing too much can be an even bigger mistake than not outsourcing any work at all. The flat economy forced many companies into huge layoffs and subsequently outsourced functions that were better kept in-house.

Wise outsourcing, however, can provide a number of long-term benefits:

1. Reduce Staff Overheads  (Outsource expertise that you do use often)

Hiring and training staff for short-term or peripheral projects can be very expensive, and temporary employees don’t always live up to your expectations. Outsourcing lets you focus your human resources where you need them most. Instead of paying monthly salaries to staff who are only required at certain times, for example, bookkeepers or payroll experts, your company can choose to outsource such jobs to contractors. Independent contractors can be an effective solution to keep running costs down, without having to cut down on expertise.

At Pure Water – we outsource our special equipment’s service and maintenance work. This leaves our inhouse service & maintenance team to be able to focus on improving our water maker’s production output & efficiency while our outsource motor equipment service provider ensures our motor’s consumable parts and standard maintenance work are done right always. It reduces our team’s rework and machine downtime by almost 100% after we decided to outsource that task.

2. Increase efficiency (Outsource non-value creation repetitive tasks)

Companies that do everything themselves have much higher cost from head count needs,  development, marketing, operations and distribution expenses, all of which must be passed on to customers. An outside provider’s cost structure and economy of scale can give your firm an important competitive advantage.

How we know this? Well, Pure Water is a trusted supplier for many MNC like SDP Global (that produces resins for diapers which are exported worldwide) to Synthomer and local port authorities such as Johor Port – they outsource part of their staff wellness program in ensuring well stocked breakroom supplies and quality, safe drinking water to us. They prefer their administrative and HR employees to work on value creation tasks vs frequent ordering of water or pantry supplies from multiple suppliers &  let our team do their replenishment on their behalf.  They found that this is a small & easy way to increase their team’s efficiency.

3. Focus on your core business (Outsource supports increased focus to your customers)

Every business has limited resources, and every manager has limited time and attention. Outsourcing can help your business to shift its focus from peripheral activities toward work that serves the customer, and it can help managers set their priorities more clearly. Often time small business owners want to reduce costs by doing a lot of tasks on their own but they did not realised that some of the activities does not serve or build income for their business. As the saying goes – “penny wise but pound foolish”.  Outsourcing some activity may increase your cost slightly but it gives you that extra time and focus on activity that matters and can build your business.

What Pure water promises to our customers has always been delivering promised quality & safe product to our customers on time. Our crew are lean and efficient. However, our crew do not have the expertise in the fields of marketing related activities such as digital marketing, SEO or social media marketing; thus Pure Water decides to outsource the work to an agency that specialises in that field so we can focus on our core mission ” We make work places happy & productive ” for our customers with our products & services.

4. Reduce capital costs (Outsource reduces fixed costs)

Cost-cutting may not be the only reason to outsource, but it’s certainly a major factor. Outsourcing converts fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid large expenditures in the early stages of your business.

We know many of our customers do that by hiring us. They didn’t want to buy expensive coffee machine but yet it will sugnificantly support in impressing their customers , so they look for us! By renting on monthly basis. not only reduce huge capital outlay, the cost of maintenance are also the responsibility of the renter.

5. Level the playing field (Outsource to access high standards of quality)

Most small firms simply can’t afford to match the in-house support services that larger companies maintain. Outsourcing can help small firms act “big” by giving them access to the same economies of scale, efficiency, and expertise that large companies enjoy.

Pure Water takes our Food Safety Management Policy very seriously and a lot of control points need frequent measures to ensure quality are tracked and maintained. This means we have many measuring equipments that needs calibration as the measures need to be accurate, yet we do not have such high number of equipment to be calibrated. However, we cannot compromise on the quality of calibration – we thus outsource the work to a professional & accredited service provider to do it. This means Pure Water gets the same level of quality calibrated checks of equipment done as well as other big corporations.

6. Reduce risk (Outsource to leverage the risk)

Every business investment carries a certain amount of risk. Markets, competition, government regulations, financial conditions, and technologies all change very quickly. Outsourcing providers assume and manage this risk for you, and they generally are much better at deciding how to avoid risk in their areas of expertise.

Many of our customers appreciates the amount of care and tests we do for our water supplies including post the purifier’s maintenance. They effectively outsource their drinking water safety to us. While drinking water may seem like a small thing, it could very well be a very huge issues should drinking water is contaminated and your staff gets sick.

Sources: https://www.allbusiness.com/the-benefits-of-outsourcing-for-small-businesses-2-1084-1 & https://www.onsightapp.com/blog/outsourcing-makes-sense-small-businesses