Outsourcing is an increasingly common way of doing business in the 21st century, especially as remote working and freelancing become more and more popular. Firms are beginning to recognize that there are plenty of benefits and very few downsides to this way of working. By outsourcing some of the main operational tasks to a third party, they are able to get on with the important jobs and be one step ahead of their competitors.
What is outsourcing?
Outsourcing is generally defined as the delegation of tasks to third-parties or external organizations. Some of the tasks that many businesses decide to hand over include:
- Social media management
- Website design
- IT services
- Payroll services
- Accounts and bookkeeping
- Search engine optimization (SEO)
What are the benefits of outsourcing to your business?
Reduced labor costs
One of the key reasons for outsourcing is that it is a convenient way of reducing labor costs. This is because, instead of retaining a number of full-time employees on the books, even if they might not be needed, outsourcing provides a multidisciplinary workforce who work only as and when required.
As well as that, labor costs are also much lower in certain countries than in the United States, which means that even if you are a small organization or just outsource a small portion of the business, the labor costs will still be a lot lower.
Furthermore, outsourcing results in increased efficiency. You are handing over some of the necessary but non-central business tasks to experts based elsewhere. As these third-parties are specialists within their particular industry – payroll services for small businesses, for example, they are familiar with all of the ins and outs in a way that your employees cannot be without expensive and intensive training and preparation.
By outsourcing and working in this way, the tasks that need doing but are not essential to the core functioning or growth of your business can be carried out effectively and efficiently by highly qualified experts who can apply their experience and expertise.
Allows you to focus on core business operations
If you keep all your business operations in-house, it can be complicated and chaotic, and external issues can cause you and your employees to neglect the core business functions. These background activities eventually require significant resources and attention, compromising what should be your business’s most pressing concerns.
By outsourcing, you take another burden off your employee’s shoulders. This task can be done elsewhere, allowing you and your team to focus on your core business operations. While you are doing that, the other tasks will be done quickly and efficiently by the third-party of your choosing.
The knowledge that experts are remotely dealing with those tasks means you can put more effort into the research, growth, and other ways of improving and marketing your business.
Helps to globalize your business
Outsourcing some of your business overseas also means that you are in a better place to position your business in today’s growing global markets. These days, US-based enterprises find that a third or more of their revenue comes from overseas sales. Depending on where you outsource your operations, you will also have the benefit of time zone difference. You will have people working round the clock, syncing with various world business schedules, meaning you never miss out on important news or opportunities.
Flexibility to adapt to market changes will be necessary to adjust business size and costs in response to the increasing demand. You need to be able to respond to the requisite costs during a dip or step up when the market bounces back. For large, organized infrastructure companies, this can be very difficult. Outsourcing helps you to resolve this problem by making short-term, flexible contracts with your outsourcing partners. Instead, the company can either reduce or increase its staff, production, etc. in response to market changes.
As you outsource specific tasks and areas to someone specializing in that industry, they will have access to the very latest news, innovations, technologies, and tools and know new ways of supporting you and your business.
If you have looked at these numerous different outsourcing advantages and realize how beneficial it might be for your business, you need to draw up a plan of action. Decide which processes are best distributed to a third party and start looking for specialists that fit those criteria. It may at first sound unnerving, but it will help you grow and improve your business.