Achieving economies of scale can happen both internally and externally. Your business does not have control of external factors, but it can control the internal factors. There are a number of ways businesses can achieve internal economies of scale and gain competitive advantage, one of them is automation, another is outsourcing.
Every business has its core operations and its peripheral operations, the ones that are important but do not add to growth. For example, invoicing in a design firm is important but not essential to its growth. Instead of spending money on an in-house accountant, the firm can outsource its invoice needs to another firm or use technical software. This is the main point of outsourcing; reducing costs and increasing productivity by giving the non-essential tasks to other companies that have the appropriate resource.
There are some major areas or departments where outsourcing can be done. Some of them include customer service, marketing, accounting, legal, and IT.
Large companies can afford to have a whole department dedicated to improving customer experience, but as a small business or one looking to cut operation costs, you may want to consider outsourcing your customer contact center. To do this first migrate to a cloud-based contact center solution. A cloud-based call center eliminates the need to run equipment on-site, lowering costs.
Outsourcing customer service goes beyond leveraging cloud-based call centers. Great customer experience has gone beyond phone calls and callers now reach companies through various other channels like email, SMS, chat, in-messages, etc. Whatever call center software you use should have omnichannel integration to connect all social media channels on a single platform. Your customer service platform should also have functions like speech recognition, call routing, call recording for QA, and IVR—it should be an IVR call center.
Ivr, interactive voice response, is a technology that enables computers to interact with customers via the use of speech and keypad tones. It does this using speech recognition software and natural language powered by artificial intelligence to understand the customer and then respond accordingly. This reduces the need for a live agent to attend to common problems.
In addition to having an IVR software, the call center should also be able to route calls to the right agent and should have callback capabilities for instances where calls went unattended. This eliminates the need for a receptionist.
For outbound calls, your IVR contact center should have greetings programmed into it using natural language and artificial intelligence. It can be programmed to deploy the greeting after speech recognition software picks up speech by the customer.
If you’re not a marketing firm then you don’t need a marketing department as a small business or startup. Marketing firms have more experience with the various types of marketing and they have access to support teams that give them—and you if you choose to outsource—a competitive advantage.
Daily accounting tasks that small businesses perform include: reconciling payments, recording transactions, recording expenses, recording inventory, paying bills, invoicing, etc most of which can be outsourced.
Invoicing can be done using online invoice software. Reconciling payments can easily be done by linking your accounting software to your bank account and syncing it daily. Printing and mailing checks can be outsourced to online services like Smart Payables at https://www.smartpayables.com/service/check-printing-and-mailing/
The Small Business Administration has requirements for small businesses that you should be aware of. However, it’s not so much or so often that you’ll require an in-house legal counsel. You can outsource your legal registrations, licensing, and other tasks to a law firm and save on retainer fees.
This includes all the technical and technology-related tasks that take up useful time and effort. For example, if you run an in-house data center, then you’d undoubtedly spend money on maintenance, repairs, and upgrades—you may also need to hire someone to monitor your center after business hours. Scaling your business will require more servers which would increase the cost of maintenance and upgrades, but by migrating your infrastructure to the cloud you can eliminate maintenance and upgrade costs. You also have the flexibility to scale as you grow. Cloud service providers also provide technical support, advanced features that you may not be able to afford, and a level of innovation that would have been out of your current price range.
All the tasks listed here are important to every business, but they are not always essential. You have total control of them as they are internal and can hence achieve internal economies of scale.