What is Outsourcing? And What to Outsource?


Outsourcing has become popular in recent years as companies look to cut costs without cutting into their profits by hiring outside services to handle some of the functions that are traditionally handled internally. But what does outsourcing really mean? What should you outsource and what shouldn’t you? Find out in this article!

Defining outsourcing

Outsourcing is the practice in which a company hires a third-party company to perform some of its business functions or any specific business needs such as web development, software development, technical support, customer service, etc.

Outsourcing can be cost-effective in many situations, but it’s important to weigh the pros and cons before determining if outsourcing is right for your business. 

When deciding what type of outsourced services you should consider, consider the following questions.

  1. Where do you want the work done?
  2. Who has the expertise?
  3. How much time would it take?
  4. How critical is accuracy?
  5. Are there any legal or regulatory considerations?
  6. What are your expectations for quality control and timeliness of service delivery?

Once you have answers to these five questions, it becomes easier to decide which outsourcing firm will best suit your business needs. If you are looking to cut labor costs, overhead, equipment, and technology costs, then looking into offshore IT companies may be an option for your business. Offshore IT refers to having the work done by an IT firm that is located outside of your country. The benefits of this kind of outsourcing include savings on labor costs as well as flexibility in terms of timing when delivering projects since they are not limited by geographical location.

Check out this blog post by Designrush on outsourced it costs to learn about outsourcing and how much it costs.

Some of the Benefits of Outsourcing are:

1. Cost Savings

Outsourcing activities normally reduce costs as you don’t need to invest in extra software, hiring costs, and direct costs related to having employees and their benefits.

2. Time Savings

By outsourcing tasks, things can get done quicker and more efficiently.

3. Flexibility

Since the resources are external, you can bring them based on your specific needs, for the time you just need them (even for short periods of time)

4. Higher Efficiency

Outsourcing non-fundamental activities to external resources allow you to focus on your core business activities.

5. Access to Scarce talent

Having access to talent that can be scarce or very expensive is an advantage when outsourcing. For example, for US companies, outsourcing your software development needs is common practice with multiple benefits, especially when it is done in a Nearshore model to countries like Costa Rica, which is very close to the US, works in a similar time zone, have a strong alignment in terms of the business culture and the way they do business while having the benefit of a lower cost for highly talented resources.

How does it work?

Outsourcing is a strategy that companies use to improve their competitiveness, but in many cases, the company knows they need help but they are not sure about what. It is here when it is key to clearly define what needs to be done, what are skills and knowledge needed, and the specific requirements that the company has for the work to be done (technology uses, tools, methodology, etc)

Choosing the right outsourcing partner can be a challenge and the best approach is to first define the final result and your expectations of the outsourcing relationship.

What to Outsource?

Aside from data entry, website design, article writing and software engineering, there are many other services provided by outsourcing resources. Here are other services that are available for outsourcing:

1. IT Management

IT outsourcing is a good option for companies when the IT department does not have the capacity for the workload or when there is a lack of expertise in certain areas. It can be used as an extension of your company’s IT staff or as a way to offload complex tasks.

2. Customer Service

There are businesses that require a staff that will address certain queries about their service. There are also those that need a support center if in case something goes wrong. Instead of hiring in-house staff and providing equipment, the practical choice is outsourcing this need. The employer can hire three to five outsourced resources to go online on specific time shifts and answer calls and concerns from clients.

3. Recruiting

Finding the right people to do certain tasks is a challenge especially if an employer is looking for someone on a long-term basis. That\’s why employers find staff that can screen prospective employees to see if they are fit for the vacant position.

4. Accounting

One of the challenging aspects of a business is bookkeeping. Hiring an office-based accountant or getting the services of an accounting firm will definitely be expensive. Today, bookkeeping is possible online. Just send the entries and a trusted accountant can help manage it.

5. Transcription

Transcribing a video or an audio clip may be simple but it becomes really hard when the clip is more than an hour long. One of the outsourced services available today is transcription. This job is usually on a fixed priced basis. The outsource resource transcribers are paid based on audio hour.

6. Translation

This is a service popular to companies that are striving to target markets outside their region. There are many languages out there aside from English. In order that other countries understand a service or item that a company is selling, they find translators who can convert an English copy to another language.

7. Virtual Assistant

This is another popular service being outsourced today. People can now get virtual assistants to handle clerical tasks that are necessary in the course of their business. Virtual assistants are usually asked to handle calls, answer emails, follow up with clients, prepare reports and schedule meetings.

These are just a few of the services that can be outsourced. With outsourcing, businesses can now be managed even in the comforts of home. To your outsourcing success!

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