The process of hiring an individual or a group of individuals to perform services that are usually done by in-house employees, also called “outsourcing”, has been a common practice for most companies today. After all, the outsourcing practice continues to boast multiple benefits, including lower operational and labor costs, as well as access to a talent pool that can be as large as it can be diverse.
While outsourcing can be done by any firm, it is a slightly different ball game for more aggressive markets and industries since these business sectors almost heavily rely on outsourcing as their primary cost-cutting measure. The consumer products and services industry, for instance, is considered to be at the tip of the distribution chain but surprisingly benefits more from outsource manufacturing to cover its costs.
What are other aggressive markets and industries that benefit the most from business outsourcing practices?
Digital Software and Tech Industry
There is absolutely no debate that the digital software and tech industries are booming and will continue to be aggressive in the coming years. However, this industry also depends heavily on the outsourcing process to cut costs — after all, app development and phone manufacturing often tends to be expensive when done in first-world countries by local developers.
One such tech company that utilizes outsourcing to an absolute maximum is major tech company Apple. All Apple products are currently being manufactured in China for good business reasons: (1) Chinese engineers can build smartphones faster due to extensive work hours and shifts; (2) manufacturing costs are significantly cheaper, and (3) Chinese engineers are, according to Apple executives, more skilled. In short, Apple looked at China because they can build iPhones cheaper and at a faster rate.
The Pharmaceuticals Industry
The pharmaceuticals industry will always be one of the most prominent business sectors anywhere in the world, as it is expected to be a $46.7 billion industry by 2026. This industry has to rely on outsourcing to keep prices affordable for its consumers, primarily through overseas products manufacturing.
Johnson & Johnson, the largest and most popular pharmaceutical firm in the United States, is firmly advocating the use of outsourcing in its business operations, stating that it is both a “business advantage and a benefit for consumers”.
Outsourcing in the pharmaceutical industry does not end with manufacturing, however. Most firms also utilize talent abroad for its research and development services that are usually very expensive when done locally. Contract research organizations, or CROs, provide adequate R&D support for firms at a fraction of the cost.
Retail and Consumer Products Industry
The retail and consumer products industry, as stated in the introductory paragraph of this article, is an aggressive industry that relies heavily on outsource manufacturing to cut costs and optimize profit margins.
One such company that takes advantage of outsourcing is Walmart. Its Great Value brand outsources primarily to China to manufacture its goods, all the while its local employees shift their focus on product quality and customer support.
After all, any product manufactured in the US can be manufactured in another country for a way cheaper cost.
Media and Entertainment (M&E) Industry
The media and entertainment (M&E) industry may be large and complex, as it involves different modes of media to present to its audience. There’s broadcasting, television, film, radio, and digital media, all of which are increasing in prominence. As this industry may be a behemoth on its own, it doesn’t necessarily mean that this business sector will not turn to outsourcing as a means to improve business.
The media and entertainment industry almost always relies on outsourcing for several services, including captioning and subtitling of films and series, video editing, and graphic design. Outsourcing can also be utilized in the media and entertainment industry’s marketing department, specifically market analysis, finance, and accounting.
In fact, the media and entertainment industry has blossomed with its use of outsourcing practices that the term “media process outsourcing” was eventually created. This form of outsourcing process has now reached 25 out of the 42 media firms in the Forbes Global 2000 Companies, making it a useful tool for an aggressive business sector.
Banking Industry
The banking industry continues to rise not only as a profitable sector of business, but a necessary part of any thriving economy. After all, banks devote themselves to assisting people with their financial needs and making sure that people make the right financial decisions.
So how do banks utilize outsourcing services as a means to maximize profit? Business process outsourcing (BPOs) for banks is usually covered by customer acquisition services, including documents approval and other customer support services.
A prominent bank that utilizes BPO services to its fullest is Citibank. This bank currently has offshore offices within India, Poland, and the Philippines, and has committed to investing $300 million for more outsourcing services.
You, too, can utilize outsourcing to achieve success in a highly competitive industry. It starts with engaging with outsourcing firms like AScaleX and getting access to a team of dedicated experts for marketing and lead generation.
Begin your journey with a discovery call with us!