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No Paradigms in Outsourcing

Changes of government can often bring a more intense cost-creep to business as the philosophy of the new cabinet comes into play. Such is the situation now as the combination of interest rates, inflation, and reductions in allowances impact society. Not without its ironies, the current regime is punishing everyone as it sets about funding its own political dreams.

What this does to the financial side of each business is difficult to measure but we know that all will feel the heat. The most common concern is that of the escalating cost of employees, as regulation driven costs such as basic wage increases and superannuation levies rise rapidly.

In recent months the superannuation levy lifted by 0.5%, Fairwork costs rose, casual rates rose by 5.75% and kilometre rates are now at $0.95. With company sales teams there is no exit door for much of these costs but there are ways in which base costs can be changed

In the sales and marketing environments, particularly retail, there is cost pressure at every point. Retailer customers want a bigger part of your pie, raw material cost continue to rise, supply is challenging and eventually some parts of the business must give way to new ideas. Many of the cost analysis processes that we troll through are more paradigms than actual progressive thinking. Time to consider again the currency of collaboration by engaging with quality outsourced companies and breaking the paradigm paralysis.

Why? What many paradigm led company managers have not properly considered is that the benefits of using outsourced services include a reduction in imposed costs. While the outsourced business must absorb such increases, the removal of costs from the company’s books can be felt at many levels. None more so than in the P&L and Balance Sheet measurements.

When you remove these imposed on-costs and the additional inhouse cost of managing finances, the actual charges from the outsourced supplier equate to a significant cost reduction. If you then add the other benefits of a much larger teams, speed to market increases, high levels of reporting and analysis, you come out with a much more valuable benefit. Time!

Once the collaborative links are in place and the brief is agreed, company managers can concentrate on the front-end of their business with much greater clarity. This increased attention to detail is a blessing as it lifts the quality of the connection with key customers, resulting in higher sales and better margins. How do we know this? Because the same lift in attention is being delivered to the consumer through quality store and brand services.

If you have not considered the value of outsourcing then it is time to do so. Whether or not you are ready to change, the lesson on how such cost advantages can be gained is well worth the time. Perhaps the chance to find out many things delivered by outsourced companies, of which you were unaware. You can make connections for these discussions through the Activate office.

Activate Group Australia members are the leading service providing companies. Collectively they are working on activities that will increase that guarantee of quality delivery by looking at accreditation, team training, information flows and direct liaison with the major retailers. Our combined teams cover most of the industry sectors and all have the skills to ensure that right-time and right-place demands are met. No paradigms here!

Contact Activate through 0403 003 809

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