How Outsourcing Can Help Your Business
Anyone working in business knows there are always a thousand and one tasks begging for your attention. Outsourcing those tasks could not only help you get to more important work, it could help upgrade your business. Outsourcing can be used for anything bookkeeping to social media marketing and has a whole host of benefits, including saving time and money.
When you outsource tasks, you focus on the things that you’re good at and that you enjoy. You can also avoid the stress of trying to do everything yourself.
If you’re ready to take the plunge into outsourcing, know that it can be a great way to help your business grow. To help you fully understand what outsourcing entails, we’re breaking down the benefits and disadvantages below.
Outsourcing is the process of hiring a company or individual to complete a task or provide a service that could be completed by in-house staff.
With predictions that global spending on outsourcing could reach $731 billion by 2023, it’s clear this is a popular practice for all sorts of companies.
The work that companies outsource can include customer service, accounting, and marketing. While the primary motivator for outsourcing is reducing financial costs, many companies find that outsourcing also frees up time for their more critical tasks.
There are many different ways that companies outsource their work. Here are a few examples:
- Operational outsourcing – This can include accounting, legal, purchasing, and administrative support, among other specialized services.
- Process outsourcing – This refers to outsourcing a specific operation, like delivering goods, that allows the main company to focus on their core business objectives.
- IT outsourcing – This can include supporting a business’s IT needs like software development, tech maintenance, and troubleshooting.
- Manufacturing outsourcing – Often industry-specific, this refers to outsourcing specific parts of the manufacturing process, either to save money or to help a company scale.
- Project outsourcing – Project management is also one of the most outsourced skills, either because a company doesn’t have enough people in-house or to meet an influx of work.
The benefits of outsourcing generally start at cost savings, yet they can also lead to improved quality, increased flexibility, and reduced risk.
Let’s dive into each of those benefits:
- Cost Savings – When you outsource work, the goal is to get the same work done for less than you would’ve paid your in-house staff to do it (or less than it would’ve cost you in time). With many outsourcing situations, the specialty business can leverage economies of scale that allow them to be more efficient and to pass the savings on to you.
- Improved Quality – Particularly when it comes to professional or operational outsourcing, employing a company specializing in a field results in better work than doing it yourself. This is because the company has the experience and expertise to do the job right. Think HR professionals handling your employee disputes instead of you, or your accounting team handling your taxes instead of you filing them yourself.
- Increased Flexibility – Outsourcing work can lead to it being more quickly than if you did it yourself. Often, this is because the company you outsource to can often scale up or down its resources to meet your needs.
- Risk Reduction – With more technical projects, outsourcing can reduce the risks involved in the work you are doing. This is because the company you outsource to often has more experience and expertise in the area than you do, lowering the chance of the mistakes you might make.
There are a few disadvantages to outsourcing that are worth considering.
- Quality Control – When you outsource a task or project, you do give up some control over the quality of the final product. This is because you are relying on someone else to complete the work to your standards. This is most often seen in outsourcing done purely to cut costs.
- Cost-Effective Spends – While outsourcing can save you money in the short term, it may not be the most cost-effective option. Over a long enough period of time or enough work, it may end up cheaper to have someone handling the work in-house. What’s more, if you are spending time dealing with quality control, any cost savings could be negated by the extra revisions.
- Communication – When you outsource a task or project, you need to be clear about your expectations and requirements. This can be difficult to do if you are not working face-to-face with the person or team you have outsourced the work to. Likewise, if you are not outsourcing with the same freelancer or outsourcing company, you may face this communication obstacle at the start of each project.
- Dependence – When you outsource a task or project, you become dependent on the outsourcing company or team. This means that if they are not available or able to do the work, it can cause delays or problems for your company.
Depending on the industry you’re in, there are quite a few services that could realistically be outsourced. Some entrepreneurs even opt for outsourcing the majority of their businesses to stay more flexible.
Curious about what services can be outsourced? These services include but are not limited to:
- Appointment setting
- Content creation
- Customer service
- Data entry
- Graphic design
- Human resources
- Lead generation
- Web design
One compelling reason to outsource is to gain access to skills and expertise that your business may be lacking in-house. This is especially helpful for small businesses that don’t have the budget to hire full-time specialists.
It also helps businesses improve their efficiency and focus on their core competencies. By offloading non-core tasks to third-party providers, businesses free up time and resources to invest in areas that will help them grow and compete.
Another interesting feature of outsourcing is that it can be a hedge against economic uncertainty. When businesses are faced with tough times, they can easily scale back their outsourcing arrangements to save costs, saving them costs as well as the legal complications of having to let their employees go.
Outsourcing can be a great way to save money and get work done more efficiently.
That said, knowing the difference between the work you can outsource and the work you should outsource will impact just how well you leverage outsourcing’s advantages.
If you’re ready to outsource more effectively, The Linq Group is here to help you get the most out of your budget. Get in touch with our expert team today to begin.