There are negative impressions and misinformation revolving around outsourcing. Whenever it’s become the topic, there’s the implication that it takes jobs from the country. Some link it to lay-offs and mass firings. However, minding someone else’s business, so to speak, isn’t all that bad.
Outsourcing is defined as the hiring of a third party (either a person or an entity) to perform the tasks, typically non-operational, done by the in-house team. Back office duties, like bookkeeping, are often outsourced. Hiring new people takes so much time and money that some businesses decide to just partner with somebody to get things done.
This means almost every company and business have, in some form, outsourced a service or two. Just look at the animation industry and the medical industry. Even janitorial services are outsourced services; commercial cleaning business opportunities are possible with outsourcing.
How Outsourcing Benefits Everyone Involved
As a business strategy, outsourcing offers a lot of incentives for businesses. There’s the financial benefit, which lets companies save up hiring and other costs. New startups and other small businesses can focus on perfecting their product or improve their services than think of other things, such as accounting. When it comes to outsourcing outside the country, your need creates jobs. It’s cheaper to outsource your business process to other countries, like those in Asia.
The negative rhetoric regarding outsourcing, however, makes this less appealing. A company might lose its capabilities, and it will take a long time for a company to recover. Some think that with outsourcing comes job losses. Lay-offs are bound to happen should a business process be outsourced.
However, it’s also mostly confused with offshoring. It’s similar to outsourcing. But with the former, it’s the whole business process that’s transferred to another country. Think manufacturing and sometimes, even customer service.
Should You Outsource?
Outsourcing has its appeal. After all, you’ll be saving hiring and operational costs you can use in the future. However, ask yourself: Do you even need to?
If all you need to do is to cut costs, don’t you have any other ways to do that?
Outsourcing is a huge decision to make because you’re giving somebody control of your business process. Can they do it just as better? You may think of customer service as something you can shrug off, but you’re letting other people look at your customers’ data.
Are you comfortable letting other people do your job for you?
No business strategy is perfect. Everything has its weaknesses and risks. Data security risks like leaks can happen. That’s how you know the new iPhone has three cameras before the announcement, after all. Product or service quality might also be affected.
You also need to think of your staff. At the back of their minds, they’ll be wondering when you’ll transfer the whole business process to wherever you outsourced it. They may feel disposable or threatened, which may lower the morale of the team.
However, if you find yourself in a dilemma where you need to hire someone for something that’s too specialized, outsourcing can be an option. If you need to fulfill extra work, you can partner with a company, as well. It all depends on what you need for your company.
Whether outsourcing is the solution to your problems or not, the important thing is to keep an open mind.