In a world where businesses are always needing to deliver high quality and standards in a cost-effective way, it was inevitable that outsourcing would eventually become a huge trend.
Outsourcing is the process where businesses commission or hire an external service provider to take on some of the services or processes that their own business can’t handle or isn’t proficient enough in. For example, many companies nowadays outsource their customer service provisions to a dedicated customer service team outside of the business, or even the country.
But what are the pros and cons of outsourcing – and could it be the key to a business’ success? Let’s find out…
Pros of outsourcing
There are plenty of upsides to outsourcing – here are just a few:
Allows businesses to bring in experts – many business owners nowadays recognise that they can’t wear too many hats. When it’s your own business, it’s very easy to be protective of the work and want to do everything yourself. Outsourcing allows you to build a full-fledged and experienced team from anywhere in the world. You can find the best person for each individual job and outsource it to them on a project-by-project basis. They will most likely put in 110% as they will want to secure future business from you.
Reduces costs – the beauty of outsourcing lies in the fact that you don’t need to take on full-time staff or expand your office space in order to accommodate them. Most of the time, jobs that have been outsourced are completed remotely, meaning a business’ operational costs will be minimally affected. Working on a project-by-project basis, you will only have to commit to one thing at a time. It makes it much easier to grow as you are able to budget much more easily.
Businesses can focus on what they’re good at – outsourcing allows those within an organisation to focus on what they’re best at, rather than trying to master a cluster of new disciplines and tasks that are necessary to the success of their business. By outsourcing things like web development, marketing, payroll, recruitment, virtual assistant roles and customer service, businesses can focus on developing their product, making sales or growing the firm, without being sidetracked.
Cons of outsourcing
Of course, outsourcing is not without its risks and disadvantages. Here are some of the cons:
Delays can happen – the growth in outsourcing has led to something called ‘The 4x Rule’. It essentially means that most outsourced tasks will take four times as long to complete as they would if you’d completed them in-house. This happens for a number of reasons; it could be miscommunication on the part of one or both parties, it could be a delay in communication, or an error in the original quote or estimate. These delays aren’t inevitable, but they are relatively common.
Privacy concerns – how do your staff feel about their payroll data being disclosed to a third party? How can you let your customers know that their order and delivery information is being handled by an external firm? Privacy concerns can be troubling in this day and age, and you must ensure the company you’re outsourcing to has robust security policies in place.
The verdict? Is outsourcing a good idea?
The pros and cons of outsourcing are clear for all to see. We believe that outsourcing is a great way for smaller businesses to deliver better services to their customers, raising standards without breaking the bank. There are, of course, some pitfalls and risks to outsourcing, but these can be navigated and managed effectively if you find the right company, with the right experience.