Outsourcing business functions can save approximately 70%-80% per person when factoring in all operational costs associated with having a domestic team member. These costs may include wages, office space requirements, and government-related commitments. By outsourcing services, companies can reduce these expenses.
The utilisation of outsourcing remains optional in most industries, but many companies are already adopting this strategy. Our concern lies with those who have not yet embraced outsourcing and how they will compete against companies that have offshore teams of operators. Big corporations can set up their own offsite operations and benefit from labor arbitrage by having the same function performed outside their domestic market, thus minimizing overhead costs.
Companies that do not utilise offshore resources will need to consider higher gross profit margins, making it difficult to compete against big corporations on quotes and tenders. Eventually, these companies may be left wondering why they cannot compete, while the big corporations continue to dominate. Outsourcing operational procedures to other countries can significantly reduce costs and enable companies to remain profitable.
We understand this dynamic and recognise that small to medium-sized companies may not have the resources or time to set up their back offices. Our goal is to help with this and enable these businesses to become lean and competitive again, minimising future market disruptions by large corporations.
At MDPC, we see this as one of the most significant challenges that small to medium-sized companies face, not embracing offshore operational options available in the market.