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When and Why You Should Consider Outsourcing

June 16, 2020

Whether a small startup, medium-sized business or huge corporation, companies of all sizes can use outsourcing as a cost-effective way to expand and augment their current team’s skill set.

Currently, over 70% of IT processes, more than 40% of HR activities and over 50% of customer service responsibilities are outsourced!

To Solve a Time or Workload Problem

Do you find that the workload is steadily increasing and is thus affecting your internal staff’s ability to complete tasks timely and effectively? You may need to look into outsourcing at least the more repetitive activities to boost your team’s efficiency.

Certain industries and businesses are also affected by seasonality – there can be certain times of the year when there is not enough internal capability for the incoming work.

In such cases, you may choose nearshoring or offshoring as a temporary solution. More often than not, a successful relationship with an outsourcing provider carries on to become a long-term engagement.

To Improve Productivity, Enhance Creativity and Prevent Burnout

You might need to provide some relief to your current staff, but perhaps you cannot afford to or just simply do not want to hire a full-time position.

Outsourcing can prove immensely useful – you will reduce workload and remove some time-consuming projects for your employees. What that translates into is reduced chance for costly burnout and turnover.

Allowing your team to focus on more clearly defined tasks will also lead to enhanced creativity and productivity.

To Build a New Product or Service

Do you continually receive requests for services that you do not currently have the expertise or skilled staff to be able to undertake? Rather than turning down the business opportunity, you can contact an outsourcing provider and add this new service to the company portfolio, opening up an additional revenue channel.

Also, hiring a nearshore partner to provide continuous support is a good way to make sure that the new product development will not hinder the core company activity. Outsourcing development can be the bridge between testing and validating new ideas and hiring your own staff, should the project prove successful.

To Facilitate a Quick Product Launch and Return on Investment

Are you a small company or a startup looking for quick initial launch of your product or service and a fast return on investment? A key factor for every new and/or small company is the technological implementation of ideas. That ultimately affects growth opportunities and makes your company more appealing to investors.

IT and software development outsourcing, for example, can help address these challenges and propel your business towards a competitive edge.

To Solve a Lack-of-Talent Problem

Some regions in the world are better than others when it comes to finding the right candidate for your team. Perhaps it is time to look elsewhere if: your HR department is having difficulties finding potential employees with the exact skill set you are looking for; you have invested considerable resources searching within your local area; you have an urgent requirement for the position to be filled.

Depending on the specific experience, expertise and hiring budgets, companies are frequently turning to nearshore and offshore destinations in their search for the right candidates. In fact, access to talent was the critical issue affecting most startups in 2019.

To Cut Operation Costs

In most developed countries, SMEs can experience financial difficulties to hire the needed expert(s), cover all associated long-term costs and ensure rapid scalability and growth. Industry average salaries for particularly skilled workers are already high, not to mention taxes, insurance, ill sick leave, paid holidays, pension scheme, technical equipment, office space, utility bills and software licenses to name but a few.

Reducing associated costs is one of the primary drivers for the outsourcing industry to develop as quickly as it did in the past two decades. The high operation costs in North America and Western Europe resulted into the common business strategy for companies to move parts of or even their entire operations into developing regions such South America, Eastern Europe, Asia and Africa.

To Focus on Core Activities

There is a saying by Peter Drucker – ‘do what you do best and outsource the rest.’ Reducing resources spent on multiple activities at the same time will improve your business focus. By outsourcing to fill in-house knowledge gaps or to reduce workload, you and your employees can more successfully navigate the ever-changing market demands and consider the ‘big picture’.

Lastly, outsourcing will often provide you with a competitive edge. Most of all, you will have more time to engage with clients and ready-to-buy leads, instead of dealing with day-to-day activities.

To Streamline Multiple Projects

Focusing on core activities can easily result into your business expanding more rapidly than anticipated. Even as a startup, you can ensure the execution of multiple projects and the handling of more orders by outsourcing.

For instance, you can work with multiple vendors or freelancers or benefit from hiring a mixed resource. Some outsourcing providers will offer you the flexibility of multi-skilled personnel, who can report on your social media KPIs while also taking care of customer service responsibilities.

To Benefit from Experience and Project Management

Nowadays, many experienced outsourcing providers can guide you through complex business processes and offer consultants, project managers and marketing specialists. As they deal with more than one client or market niche, they have experience hiring, managing multiple large-scale projects and keeping up with technological trends.

Such providers often work with conference organisers and professional certification services. They seek to expand the knowledge of the outsourced staff by covering specialised training costs and entry to professional events, which ultimately leads to an expansion of their portfolio.

To Get Ahead of the Competitors

Gaining a competitive edge is crucial for all businesses, but failing to get ahead of the competition can be especially crippling to startups.

Small and new businesses can benefit greatly by outsourcing marketing activities.

Marketing agencies can provide their customers with an established network of partners, stable infrastructure and valuable market knowledge. According to research, more than 70% of marketing executives agree that outsourcing marketing activities will result in a more beneficial company position compared to their competitors.

Outsourcing your lead generation strategy might also prove beneficial, if your company has a business-to-business focus. Outsourcing vendors often have more resources, experience and advanced skills in successful inbound marketing. They may also have a readily available and properly acquired database of industry professionals and qualified leads, thus quickly facilitating meetings for your sales representatives.

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