Businesses have one common goal: growth. To grow a business, many strategies can be employed, but one question is: Should business operations be outsourced or done in-house?
Outsourcing has a number of benefits, such as reducing costs, improving focus, and ensuring internal resources are allocated to core business functions. But outsourcing is not without challenges.
In general, you should make sure that the activities you do in-house add value to the business and that those you outsource cannot be done by your current employees.
Your business should not take outsourcing tasks lightly. Since freelancers and collaborative projects are on the rise, large and small businesses alike are increasingly outsourcing tasks from simple data entry to outsourced payroll services and achieving goals. But does outsourcing make sense for your business?
You should consider several factors before investing time, money, or your trust in outsourcing. The following guide will help you determine if hiring a third party is the right decision for your business.
How Do You Justify Outsourcing?
Approximately $92.5 billion was spent globally on outsourcing in 2019. But before you tap into this growing market, you must first consider the reasons for outsourcing work. Financial benefits – saving money – are among the most common reasons businesses choose to outsource roles and functions rather than hiring full-time professionals.
You may also feel that your in-house staff is overburdened with work and that contracting out parts of the work would be more convenient than hiring new employees.
You need to be honest with yourself and ensure that your reasons are in the best interest of your business. By outsourcing will you meet goals and achieve progress more effectively than by keeping everything in-house?
Five Signs Your Business Should Outsource
Every business is unique and has its own goals and needs. Outsourcing, however, can benefit most industries by providing comprehensive solutions and services that can help businesses grow and succeed. Following are five key signs your business is ready to outsource:
- Increasing efficiency is your goal: When efficiency is lacking in your business, outsourcing might be right for you. Outsourcing can greatly enhance efficiency, which is crucial for business success. Your team’s efficiency can be significantly enhanced by working with a good outsourcing company.
- Maximising productivity is important: A lack of productivity among your employees could indicate your business should outsource. Companies benefit from outsourcing by taking over tasks and jobs that take up too much of the core team members’ time.
- You would like to serve more clients or customers: You may find outsourcing to be a great solution if you can’t serve as many customers or clients as you’d like. As your outsourcing company manages time-consuming administrative responsibilities, you can focus on serving your customers and/or clients, which can increase your customer base.
- Your goal is to reduce operational costs: Revenue can be eaten up by operational costs. By outsourcing operations, you can accomplish your goals in an affordable, efficient manner. Outsourcing is necessary when your business is spending too much on operational costs.
- Processes and operations need to be streamlined: Streamlining all processes and operations can be achieved easily and effectively through outsourcing. Over half of all businesses that choose to outsource do so because of these efficiencies and so they can focus on their core business operations.
How to Find Reputable Companies When Outsourcing
You can’t just outsource to any company or individual. There are varying levels of cost, quality, experience and qualifications on offer depending on the company you enlist. For example, there are cheap options like Fiverr and Upwork that can provide cheap outsourcing solutions for simple tasks.
However, users who have used Fiverr for a while caution against outsourcing anything that requires secure access to your business systems and operations, anything that takes a long time to complete, or anything you cannot clearly describe in one email.
For specialised tasks, enhanced data security and ongoing lines of communication, you will need more specialised freelance and outsourcing companies and individuals. So how do you find reputable operators and weed out their inferior competition?
Start your research using old-fashioned methods. Ask your friends, colleagues, and team members if they know any good outsourcing companies. Search Google for outsourcing vendors in the markets you desire and that specialise in the technology or industry you work in.
To determine if the providers’ developers are knowledgeable and experienced, go through their websites, blogs, LinkedIn profiles, and case studies. You should also check if they have worked in your industry or developed products similar to yours. Client testimonials, case studies, and success stories can be good indicators of client satisfaction.
Consult each potential outsourcing partner after you have selected your final candidates and interview them. Ask them about their business model, their experience, their fees and timeframes for turnaround. A human face is often the final assurance you will need that they are a company you can trust to handle the work you need to outsource.