Outsourcing – Beyond Profit

Offshore outsourcing has always been associated with private businesses, from small and medium enterprises (SME) to large multinational companies. In the midst of an economic slowdown, there are other organisations that can benefit from outsourcing.

Non-profit Organisations

Non-profit organisations have a different financial structure compared to businesses. They are under specific and strict tax laws. Their cash flow does not come from profit, so they need to look at those funds clearly and allocate them properly.

Today, non-profit organisations face growing demands for social needs, diminishing resources, and increasing financial pressures. It can be very difficult for this kind of organisation to thrive especially if they can only rely on grants or donations.

Small and medium non-profit organisations can outsource administrative functions such as payroll, and bookkeeping and accounting. This will enable them to focus on their core mission and streamline processes such as cash flow management. Service providers can look after financial records to ensure accurate and transparent reporting.

Government Agencies

The government and its institutions are also experiencing the same problems as non-profit organisations. The recent economic slowdown has proven that even First World economies are not immune to uncertain market conditions. Even without this, it’s a fact that lack of funding has always been one of the main problems encountered by government projects and programs.

While not all public sector services are ideal for outsourcing, the government can still benefit from offshoring functions that are expensive when kept in-house.

A good example would be IT systems and management. Information communications technology (ICT) infrastructure is expensive to build, maintain, and update. The government can outsource to an offshore IT service provider, or to the Cloud. This ensures that tax payers get more value for their money.

Outsourcing is not just about labour arbitrage. Through a responsible and mature approach, outsourcing can be used to free up resources and focus on core functions.

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