Very few companies entirely function independently. Outsourcing allows businesses to streamline their processes while cutting costs at the same time. However, figuring out when and how to outsource, can prove to be a complicated process. In fact, most have very contradicting opinions on outsourcing.
Though it consumes more time than outsourcing, locally hiring helps you build teams of skilled people who will grow with the organization, contribute to the core business and are in it for the long haul, not short term engagements. However, if you’re looking to cut costs without compromising on skilled personnel, outsourcing is a clear winner. Outsourcing was once considered a luxury, affordable only for larger companies. Today, enterprises of all sizes use outsourcing to build successful businesses which scale well while saving a lot of money in the process. A growing trend in the last several years has been small business owners increasingly choosing to hire vendors from beyond their borders. This increase is largely thanks to technology and globalization making it simple to find people with specialized skills.
Most companies outsource in one of two ways. They either outsource a single part of their daily operations, or they choose to establish outsourcing as a strategic part of their business. In today’s market, it has become quite easy to outsource most tasks be it in the early stages of your startup or if you’re poised to scale. This opens up a lot of opportunities to get better-skilled services for less money. If you’re considering outsourcing, ask yourself the five questions listed below. Most organizations begin by asking themselves the very first question:
What tasks do we outsource, and which activities should we choose to do in-house?
What is the competitive advantage of doing the task in-house?
Is it one-time, specialized service requirement?
Is it a product, someone else can do better and more efficiently?
Are the costs of the service lower than what it would take in time and human resources to get it done in-house?
Your answers to these questions will tell you whether to outsource or not and it will have a huge effect on your organization's short-term and long-term success. Many software development companies offer an array of services encompassing the web, mobile and more. For you to quickly build mobile and web applications of the same quality as these experienced providers, you would have to invest upfront in highly skilled human resources yourself. When you choose to outsource, the funds you save on full-time staff can be redirected to other areas of your company.
Now, when should you outsource? Your answer to this question should depend on two factors, your budget and how much time you have on your hands. You may have activities you could very well do in-house with the right amount of time and money. Maybe you eventually plan to recruit in-house developers to increase your software design flexibility. Meanwhile, you still need to update your back-end systems and your website. In the interim, you can outsource this work to a vendor with the long-term goal of recruiting in-house developers. Keep in mind outsourcing requires you to establish goals and a timeline with your vendors.
Outsourcing will bring a fresh perspective to your business while saving you time and cutting costs. When implemented well, outsourcing can help you move forward with the key growth initiatives, strategically utilize your resources and maximize your time. The outsourcing trend doesn't look like it will slow down anytime soon, given the dearth of hiring. You too should consider using outsourcing to your advantage. However, if you don’t outsource wisely, it can put your business at a competitive disadvantage. You could receive products which don't meet your organization's quality standards or lose control of proprietary information.
Companies adopt outsourcing and offshoring for a variety of reasons depending on their vision and purpose. While the vision varies from company to company, the fruits of labor are visible among the leading enterprises' worldwide, where outsourcing and offshoring have become a core component of their day to day business strategies.