Why Outsource? Businesses everywhere seem to be doing it, but why? Let’s discuss the benefits of Outsourcing and the potential issues.
First of all, what actually is Outsourcing?
Outsourcing is when a company delegates a project or department to a third party to complete. If this work is being done abroad it is referred to as Offshore Outsourcing and if it is being done within the same country it is called Onshore Outsourcing.
When we think of outsourcing we often think of call centres. These are regularly outsourced to other countries such as India and are a prime example of Offshore Outsourcing.
Another task that is often outsourced is recruiting; this is a great example of Onshore Outsourcing.
Other common duties to outsource are HR, cleaning services and of course you can outsource your Software needs to companies like us, Headforwards.
There are many benefits to outsourcing, for instance it enables you to focus internally on the core of the business. Without having to run an accounting department or an IT operation, companies are able to direct their attention to work that really matters internally.
It can reduce the operation costs of a business significantly by minimising recruitment costs, reducing payroll expenditure and other office overheads such as IT equipment.
Efficiency can be increased as you are using experts in that particular field. If you are not an IT specialist how do you hire the right person to create your software? Outsourcing helps you gain access to a higher level of skill from a credible source.
It can also help you tap into a local knowledge base; in certain sectors this can be key particularly if you are planning to target that area in your next sales push.
The fact you are not tied in to lots of employees can look better for your balance book, which is beneficial if you are planning to make your business public in the not too different future.
However there can be issues with Outsourcing. For example communication can be difficult, particularly if you are dealing with a language barrier. Rapport can also be hard to build when you are dealing with each other remotely. In Offshore Outsourcing the time difference can also be hard to manage and it has been known that people may feel like they are losing control of a project.
To make Outsourcing work as a viable option you need to ensure that you select the right third party to work with. It is essential to have regular and open communications with them and be honest with your feedback.
You should also think carefully about where to Outsource to, there are a few things to consider when making this decision. Firstly are you sure the human rights of the workers are respected. Is this a company you want your business to be publicly associated with? Could you be benefitting the local economy by keeping in Onshore?