Top 8 benefits of outsourcing 2020: Pros and Cons and Do's and Don'ts about outsourcing in the current market situation Strategic Ways To Outsource And When To Do It
What is outsourcing exactly and would your business benefit from it?
There are a lot of factors to consider in order to run a successful business. You must have the right people, choose the right timing, offer the right product or service to the right customers. Having the right resources is crucial, but there is something that distinguishes average companies from great companies like nothing else and it is making the right decisions at the right timing. The management choices a company makes can either lift it to the skies or crush it completely.
For the sake of winning the market companies today must take a very progressive approach. Their focus must be on innovation and technology, planning and funding, and scaling up their teams. When it comes to having the right team, a decision that many successful companies make is taking the outsourcing route.
Let’s dive in and strip away the myths about outsourcing.
Outsourcing is the business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company's own employees and staff.
Pros and Cons of outsourcing and is it worth it?
Speaking of outsourcing, the first thing that comes to mind is that companies outsource first and foremost to cut costs. In some cases it may be true but nowadays, it is not only a matter of cutting costs. It is also about reaping the benefits of strategic outsourcing such as accessing skilled expertise, reducing overhead, flexible staffing, increasing efficiency, reducing turnaround time, and overall generating more profit. Let me further expound those benefits for you.
1. Get access to skilled expertise
One of the key reasons why a business may outsource a task is when it requires a skilled expertise. To allow your company to focus on your core mission in providing a high quality product and service to your customer, outsourcing the task to people who can perform it better seems like a better option. By outsourcing vendors who specialize in the field can use their specific equipment and technical expertise to build a better product. These skills lead to a faster delivery time and a higher quality product.
2. Focus on core activities and tasks
Workload increases with additional insignificant and repetitive functions which makes the quality of your core activities suffer as your business grows. Outsourcing as a third party plays an important role by allowing your key resources to focus on primary business tasks.
3. Provide Continuity and have Better Risk Management
Outsourcing will allow you to share any associated risks with your outsourcing partners thereby reducing your burden. By outsourcing to a competent outsourcing partner you reduce the risk involved in having the same task done in-house by staff that may not be as competent in that field.
4. Increase in-house efficiency. Promote growth
Allocating tasks to your outsourcing partner, they share the workload of your employees. This allows you to develop your internal task force and use them more efficiently, giving your business a competitive edge. The ultimate benefit of outsourcing is that it helps your organization become more competitive in the market. Through strategic outsourcing to an outsourcing partner, you are not only providing your customers with best in class services but increasing your productivity while managing your in-house resources intelligently. Outsourcing can help you surpass competitors who have not yet realized the benefits of outsourcing.
5. Run your business 24X7. Maintain operational control
Choosing a partner who maintains your business 24X7 gives you the added advantage of making full use of your 24 hour day. Your outsourcing partner can take over and continue your work even after your employees go home. They can complete critical tasks, fix downtimes and send it back for your review the next day.
6. Offer Staffing Flexibility
Having projects and tasks outsourced to another company offers your internal staff to be more flexible and thus your teams focus on higher-value projects. Your external team can take care of the routine monitoring and management around the clock while you have your staff free for mission-critical projects, deadlines and exclusive problem solving that can’t be delayed. That means more focus on your business, more work done on time and more incomes.
7. Develop internal staff. Improve service and delight the customer
Your outsourcing partner, with their skilled expertise will produce quality deliverables faster, increasing your turnaround time to the customer. When developing internal staff you would be able to achieve better quality and faster productivity having more teams by your side. This will not only promote you in the market but also make you a better employer. With on-time deliveries and high-quality services your customers will be delighted. Outsourcing can help you benefit from increased customer satisfaction and thus creating a stream of loyal customers.
8. Lower costs and save BIG!
Every company wants to have more money saved than spent, and here comes the first benefit of outsourcing that most people are familiar with – costs saving. You don’t have to rent an office place and hire the most expensive, while highly competent developers in town. You can do your research and find a great remote team of professionals who can do the job for you. You can cut costs by 60% not having to pay for all the expenses of having an internal team.
1. You Share Financial Burdens
Although it can be nice to bring in expert agencies to share in risks, it can be dangerous to tie your business to the financial well-being of another company. Again, you’ve got to spell out any and all terms and conditions in contractual arrangements plainly – because you don’t want to take a financial hit if they fail to deliver. If you find a certified company that has been in the industry of outsourcing for quite some time, that means that they do well and it is worth outsourcing to them. Nowadays, you might find information in just a couple of clicks in review directories and evaluate your partner.
2. You Risk Public Backlash
If you’re taking work elsewhere, your business very well may run into criticism from consumers that have taken a moral stance against outsourcing. Right or wrong, for better or for worse, some form of criticism is often inevitable. Think carefully about whether your customers would be affected in a case you outsource a few of your tasks.
3. You Shift Time Frames
A disadvantage of outsourcing particular tasks is the risk that your freelancers or partner agency may be doing other work and be bad at time management. As a result, it might be difficult to synchronize schedules to ensure your customers receive what’s promised to them on a reliable timeline. That's why you might think about finding an outsourcing comapny, instead of a freelancer or agency. A company with more employees would be more responsible to your needs and be always there for you and your teams.
Outsourcing and the market situation in 2020: Can outsourcing help you deal with the recent business downturn?
True Media CEO Jack Miller says, “Outsourcing helps agencies run more profitably and provides clients with deeper resources. We’ve even embedded our employees in other offices across the country so clients feel like they still have an in-house team, but with access to much deeper capabilities.”
While the restrictions lead to empty offices and staff working from home, not having the equipment, infrastructure or management tools may cause great difficulties trying to deliver work.
With work not getting done, many companies have to take the work back in-house. Even companies that can deliver have to deal with projects that are now on hold and the lack of new incoming projects.
In these times anyways there is a light at the end of the tunnel. In response to the tough times, more companies decide to outsource key business functions to better manage their costs and minimize risk in a downturn economy. Having an outsourcing partner would help you run your business. Dealing with processes you wished you had automated before will no longer be a problem with an outsourcing partner. The circumstances will be the deciding factor for many companies to open up towards digitalization and automation of their work processes. So, in the long run, companies may be more likely to outsource their IT or business processes.
The biggest challenge nowadays is staying in business. When deadlines are not met, and schedules have to be changed, most companies understand and get flexible. The best advice is: keep communicating with your outsourcing partners. Be transparent about the status of the project and how you will try to deliver. Make sure your clients see that you are doing the best you can, and stay strong.
Once the challenging times are over, there will be a bigger demand for outsourcing services. This is especially the case in the areas of security, digital working environments and cloud services.
What and when should you outsource?
Typically, a company must outsource tasks that are critical to its operations, and not a vital component of its strategy. Those are tasks related to the day-to-day operational management, repetitive tasks that consume too much time of the staff and slow the process of product development. Tasks that offset the main focus and distract you from reaching your goals. Those could also be tasks that you would like to be done more carefully and in the right manner but are not a core component for the company: the option is to outsource them to a third party with deep technical expertise in order to build a better product.
One of the best ways to decide whether or not to outsource a task is to perform a cost/time calculation. You may have tasks that you could conceivably do in-house with the right amount of time and money. In the short-term, you can outsource this work to a contractor, with the long-term goal of recruiting in-house developers.
One-time events also work hand-in-hand with outsourcing. You may need a task done once-for example migration to the cloud, which may cost less time and resources done by another company. If you have current team members with experience in IT infrastructure, you might decide to migrate in-house. Otherwise, it may be more cost-effective to take this project to a third party that has expertise and can deliver a professional service in a timely manner.