What is outsourcing? This business practice has taken the world by storm. But, why? And what to outsource? What are the pros and cons of outsourcing?
This Outsourcing 101 Infographic will give you a complete overview of this business practice, starting with what outsourcing truly is. We’ll go through the differences between insourcing and outsourcing, and the pros and cons of each.
And most importantly, we’ll explain why so many businesses are jumping on the outsourcing bandwagon! Finally, you’ll get a couple of examples of what sort of services are companies outsourcing nowadays.
What Is Outsourcing?
Every business has secondary tasks. Aside from the main, core tasks that are directly related to your product or service production, businesses also have peripheral activities that help to their success.
Marketing, human resources, accounting… All these are examples of secondary tasks that are all necessary for a company to run smoothly. However, unless a company is focused specifically on one of these, they are not part of the product the business offers.
Outsourcing is an amazing and straightforward way to tackle these secondary tasks. Outsourcing businesses take these peripheral activities from your hands, so you can keep the high quality of an expert, without having to hire one permanently.
Insourcing vs Outsourcing
Insourcing (having in-house experts for these secondary tasks)can be an option for many businesses. After all, it has the added benefit that the expert has knowledge of both this secondary task and your company. But if this secondary task is used only once in a while, or it demands special personnel or equipment, it might become a hindrance rather than an aid.
Advantages and Disadvantages of Outsourcing
As outsourcing is based on third-party providers, it’s no wonder that security and reliability are some of the most important downsides to consider. As shown in the pros and cons in the Outsourcing Infographic, the challenges for this business model lay in the need for good communication and trust in order to be able to make the most of it.
However, over 78% of businesses feel positive about their outsourcing experiences. As long as the issues are faced with a partnership set of mind, the benefits will overcome by far the difficulties.
The Advantages of Outsourcing for Businesses
According to Deloitte’s 2018 Global Outsourcing Survey, outsourcing is an amazing source for boosting innovation within leading businesses. Disruptive technology and solutions, just like cloud and automation, are what fuel many outsourcing possibilities. It’s no wonder that outsourcing is so tightly related to innovation.
But even for smaller businesses, outsourcing can be a source of enhancing performance, lowering costs, and accessing services that would be otherwise out of reach. And, most importantly, it frees time and resources for businesses to focus on core tasks.
Forbes suggests that outsourcing is an amazing tool for dealing with specialized tasks that are not worth having an in-house specialist. Outsourcing is all about efficiency, so big or small, it can really make an impact on all kinds of businesses.
Depending on their own needs and organization, businesses can outsource pretty much anything. In the Outsourcing Infographic, you can find the most common areas for small businesses to outsource. From accounting to human resources, imagination is your limit when it comes to outsourcing.
At the end of the day, what you can outsource depends on what you consider your core tasks, and what could benefit the most from an external expert.
Steps to Begin Outsourcing
So, after reading all of this, you’ve decided that you might want to try outsourcing some of your organization’s secondary tasks. But where to begin?
These six steps will help you get a blueprint for future outsourcing endeavors you might want to try in the future.
Define secondary tasks. What are the processes and tasks that are ineludible, but are not related to your main product or service? Do you have secondary tasks that require a high grade of expertise? Tasks that are recurrent but not worth having someone dedicated to them all the time?Identifying bottlenecks in your processes can also be a great way to find potential outsourcing possibilities.
Evaluate the impact. If you could get rid of any of them without any consequence which one would it be? Which would save you more time, money, or resources? Which one would make life easier for all your other employees?
Evaluate potential risks. What dangers could it entail to outsource this task? What about potential confidential information?
Research potential providers. Now that you have a specific task or area you could outsource, it’s time to evaluate the possibilities. What do they offer you? Would they take over the total of the tasks or will you still have to get work done? How and when will they deliver?
Conduct a cost-benefit analysis. Now that you have your options defined, how much will they cost you? How will this impact your business? Will the services they provide positively impact productivity or profitability in other areas, and how much?
Contact your outsourcing company. Above all, the outsourcing company you pick as your provider is their trustworthiness and reliability. Once you’ve got a good idea of what task you want to outsource, what you expect to get from it, and how much you’re willing to spend, you should contact your potential providers to find a business solution that work for both of you!
