Outsourcing is a buzzword in business, and for good reason. There are three businesses you know of that have used outsourcing to build the foundations for their success, from the ground up, balancing profitability vs revenue.
What is Business Process Outsourcing?
Business Process Outsourcing (BPO) is in high demand worldwide and is sought after by businesses that want to increase their revenue growth and would rather seek out specialised companies than recruit and train underqualified local hires. By contracting and sourcing business services from third-party service providers, companies benefit from working with experts, improving the quality and consistency of their operations while bettering their profitability vs revenue margins.
Outsourcing for Success and Revenue Growth
During the Covid-19 pandemic, many companies were forced to change their operations and take on working remotely together, and this had a negative effect on revenue growth. Out of this crisis emerged a number of successful examples of outsourcing, drawing attention to BPO as a potential solution for various business-related challenges.
There are several hugely successful instances of outsourcing worth noting in the business world, such as Skype, Slack and WhatsApp, all of which opted to outsource non-core and core business processes. It is undeniable that businesses everywhere have realised that both remote work and outsourcing are viable beyond the pandemic, and this is a well-founded take.
Outsourcing can address an assortment of issues within a company simultaneously, in addition to saving resources and improving revenue growth. Outsourcing can also allow businesses to do the following:
- Combat a lack of internal resources
- Gain access to specialised workers
- Increase productivity
- Streamline operations
- Improve focus on core processes
Outsourcing therefore provides an organisation with the means to optimise their business operations, alleviate the workload for in-house employees, and increase productivity. Therefore outsourcing helps businesses beyond just improving their profitability vs revenue margins. Here are some valuable case studies examining three hugely successful businesses that relied on outsourcing in different forms:
Profitability vs Revenue: WhatsApp
WhatsApp is an internationally available centralised instant messaging cross-platform software, free of charge. According to stats given by WhatsApp in its meta description, the platform is used by over 2 billion people in 180 countries.
WhatsApp started out with barely any financial means, with around $250,000 in seed funding to work with. The team therefore had a clear need to limit their operational costs and focus on revenue growth to avoid an untimely business failure. They turned to outsourcing as a solution to improve their profitability vs revenue margins.
While customer support, operations and monitoring revenue growth became the central focus of the in-house team, WhatsApp hired Russian developers for their excellent skills, which the founders found to be significantly better than any talent they could’ve sourced locally.
The services that WhatsApp chose to outsource were not minor or miscellaneous. The company chose to outsource their entire app development, relying on a third party to handle the very core of its product.
WhatsApp’s outsourced its development from teams in Eastern Europe, and after outsourcing, the app broke into the top rankings on Google Play, App Store and other platforms. WhatsApp also opted to outsource its iPhone app development from a software engineer, Igor Solomennikov, who the company later hired as part of their in-house team.
Profitability vs Revenue: Slack
Slack is a messaging app for businesses and is one of the most widely used communication channels for start-ups and small companies.
When the company was first founded, it only had four developers as its core team. Slack made the executive decision to outsource a design firm for its beta testing, so that they could ensure revenue growth, improve their profitability vs revenue margins and ensure the success of their product. Butterfield took Slack’s prototype to user interface specialists MetaLab, and the company was responsible for building the app as we know it from the ground up.
MetaLab provided the following services to Slack:
- Logo design
- Web development
- Software components
- Mobile applications
By outsourcing its app design and beta testing, Slack ensured the success of their product. Slack’s story is proof that outsourcing can be crucial to the development of a successful product from its early stages, and a key part of cultivating revenue growth. The concept and its execution were effectively and strategically refined through the process of outsourcing, resulting in great profitability vs revenue for the company.
By outsourcing, Slack also ensured that the productivity of in-house employees was maintained, lessening their workload and allowing them the time and resources necessary to execute internal processes seamlessly. This ultimately ensured the success of the enterprise.
As of 2023, Slack is worth an impressive $13.2 billion with a market share of 2.26%. MetaLab’s input allowed Slack to refine their existing model and create a resoundingly successful app that is now used by over 10 million daily users as of 2023.
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Profitability vs Revenue: Zoom
Zoom is a VoIP (Voice over Internet Protocol) platform that facilitates people to make and receive free voice and video calls over the internet using a computer, web browser, or mobile phone.
Zoom was founded in 2011 by Eric Yuan, who had previously worked at Cisco and WebEx. Eric Yuan wanted to create an online video conferencing platform that would be easier to use than traditional systems. He believed that cloud computing and outsourcing would be essential to his success.
Outsourcing was instrumental in developing Zoom’s product, as well as their revenue growth and establishing good profitability vs revenue margins. Here are some of the many ways that outsourcing contributed to the success of the company:
- In 2011, Zoom began to outsource the development of its video conferencing platform to Amazon Web Services. This enabled the company to move quickly and keep costs low.
- In 2012, Zoom released its beta version and contracted with several third-party developers to help build its product. As a result, company operations became easier to scale, and its employees were left with more time to focus on developing core products and features.
- By outsourcing to a development team based in China, Zoom has been able to ensure better profitability vs revenue margins, since personnel costs are less expensive than in other jurisdictions.
Zoom began offering its product to enterprise customers as a trial run before making the platform publically accessible as a mobile app in 2014. With outsourcing, Zoom was able to build a resoundingly successful business model, ensure revenue growth and emerge with a great profitability vs revenue ratio. Outsourcing allowed the company to focus on developing its core product and features, and improve productivity which ultimately led to its success.
Zoom’s reach and customer base are profound, with over 300 million daily active users as of 2023.
Outsourcing Can Increase Your Productivity
Many businesses have valid concerns surrounding outsourcing, as they fear leaving their profitability vs revenue and the future of their revenue growth in the hands of an unreliable third party. The decision to outsource is not one that should be taken lightly, and vetting the company in question can help you avoid a headache later on in the process. Read our article on the top reasons for outsourcing in 2023 for a thorough guide on how to avoid the drawbacks of outsourcing and navigate any unexpected difficulties.
For large, successful companies and small start-up companies alike, outsourcing can be beneficial in a number of ways, if the process is approached strategically.
When a company chooses to contract a reliable third party, outsourcing can do the following:
- Save a business time and resources better allocated to core-process-related tasks
- Reduce the workload of internal employees, thereby improving operations and boosting team morale.
- Cut costs, as outsourcing offers a model where companies pay for what they need as and when they need it.
- Allow a business to access specialised expertise 24/7.
- Improve the quality of services offered to customers by outsourcing to qualified individuals.
- Increase revenue growth.
- Allow a company increased flexibility and ease of scalability, either up or down.
- Reduce labor expenses, as fewer in-house employees are needed.
- Save physical space which can be repurposed and used for other business operations.
- Eliminate the need for specialised equipment, such as headsets and other supplies necessary for tasks like customer service.
There are many benefits to outsourcing, however increased productivity is arguably the most advantageous of them all.
By outsourcing, companies can focus on their core tasks, cut costs and increase revenue growth, but also streamline their operations and boost their productivity. For instance, outsourcing customer service provides consistent support for clients and allows team members to focus entirely on their own tasks. Ensuring that reliable application support is accessible 24/7 means that technical issues will be dealt with timeously, and processes will continue to run seamlessly. Both of these factors are likely to reduce frustration amongst employees, while streamlining operations.
Outsource Services and Increase Your Productivity
Outsourcing could be the solution you need to increase your business’ productivity, giving you desirable profitability vs revenue margins in 2023.
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We offer free consultations, as well as technical support for your middleware, monitoring and management requirements, and other niche products. Our application services include linear, BI, financial application, and Salesforce support to get your company’s operations running smoothly. With specialised help-service desk and escalation management teams, solverASSIST caters to all your customer service requirements timeously and professionally.