Outsourcing 101: Everything You Need to Know

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An increasing number of businesses are choosing to outsource today. As businesses grow, owners delegate certain tasks to external professionals to help them get ahead. If you are at this stage at your business, you may be searching for a bit more information about the outsourcing process and what to outsource. This post reveals everything you need to know.

What is outsourcing?

Outsourcing is a rather broad term. In general, it means assigning a task that would typically be performed in-house to a firm or individual outside your own office. Outsourcing can take many different forms, including the following:

  • Using online services for one-off tasks
  • Using work-from-home contractors and virtual assistants
  • Working with an agency to help you locate the best outsource contractors
  • Contracting with outsourcing firms that provide a wide selection of services
  • Hiring speciality independent contractors to perform tasks that your current staff do not cover

There are no restrictions regarding the tasks that can be outsourced. Everything from social media marketing and technical support to human resources (HR) and accounting can be outsourced.

What are the benefits of outsourcing?

There are many benefits associated with outsourcing, so long as you go about it in the correct manner. This includes the following:

  • Cost savings – One of the main reasons why a lot of business owners outsource is to save money. This is because you pay for what you need when outsourcing, which can sometimes be cheaper than the cost of taking on new staff or training your existing employees.
  • A specialist service – You can take advantage of expert knowledge to ensure a task is carried out to the highest standard. If you run a pet store, for example, it makes sense to outsource your marketing to a firm or individual that has the specialist skills to give your pet store greater visibility and attract more customers.
  • Develop internal staff – Rather than your staff focusing on tasks that do not fall within their specialism, they can focus on skills that will benefit your business and your bottom line.
  • Risk management – Inconsistency and uncertainty can occur when there are periods of high employee turnover. Outsourcing can help to bring a level of continuity to your business while reducing the risk that would occur due to a substandard level of operation.
  • Staffing flexibility – You can easily adapt to cyclical or seasonal demands thanks to outsourcing, as you can bring in added resources as and when you need them.
  • Focus on core activities – Focus on what your business does best! By outsourcing important business activities that are not your main area of specialism, your team can re-focus without sacrificing service or quality in the back-office.

How do you decide what to outsource?

The key question… should you outsource that or is it better to continue handling it in-house? There are a number of key questions you can ask yourself to determine whether you should outsource something.

  • Will you save money by outsourcing? The first thing you need to do is spend a bit of time working out your finances. You need to determine what is the most cost-efficient route to go down. It is important to consider costs as a whole; don’t merely look at the startup costs. Outsourcing can often be a bit more costly to begin with, yet it is usually cheaper in the long run. This is why it is a good idea to calculate the costs over a period of a year when comparing the two so that you can get a good understanding of the true cost of both options.
  • Is it distracting your employees? Are your employees spending more time on the task in question that they should be? If you find that your core activities are suffering because your employees’ attention is elsewhere, it is time to start thinking about outsourcing. This will enable your staff to focus on doing what they do best.
  • Do you need a one-off service or will it be on going? This is one of the important questions you need to ask yourself. Does this part of your business require constant attention? Is it a one-off task? Or will you only require people during certain months of the year? This will help you to determine whether outsourcing is right for you. If it is a one-off task you are dealing with, outsourcing is often best. For example, if you require legal services for a case that has been made against your business, this isn’t something that happens every day, and so it is certainly better to enlist the help of professionals. This site explains more about seeking outside expertise for such incidents. On the other hand, if this is an on-going task, for example, bookkeeping or accounting, you may want to consider keeping it in-house. This is so long as it is not distracting your employees, as per the former point.
  • Does the task demand specialist skills? You need to discover whether specialist skills are required for the task. For instance, if you are going to start a marketing campaign, and your team does not have any training or experience in this area, you may want to consider outsourcing. After all, the success of your service or product will heavily rely on how it is marketed, and so it is important to get it right. You don’t want to risk your product being a flop because of an amateur marketing campaign.

Before you get started…

Before you get started, make sure you carry out the following steps…

  • Make sure you put together thorough mock-ups – People are going to be fives times more likely to respond to you if you are clear about your requirements. Of course, your requirements may change over time, and this is completely fine. However, you do need to be clear about what is necessary so that you and the professionals you are conversing with are on the same page.
  • Know your budget – The next thing you need to do is determine how much you can afford. You will be able to narrow down your search more effectively if you know your budget.
  • When do you want to start – In most cases, the answer to this question will be ‘yesterday!’ However, it is important to have a good think about when you do really need to start the project. Service providers will often pitch to you depending on the availability of talent within their teams.
  • Deadline – It is also important to determine when the tasks need to be completed by. Do not enforce a strict deadline for the sake of it, as you could end up alienating some of the best candidates. However, if you do have a strict deadline and you cannot budge, make sure you are upfront from the very beginning.
  • Your necessities – You should make a list of any of the necessities you have, i.e. those qualities that you simply won’t budge on. For instance, you may require specific experience or you may want a service provider that is local.
  • Understand your priorities – Last but not least, you need to understand your priorities. Figure out what is important to you, be it scalability, security, budget, timeline or something else.

Hopefully, you now have a better understanding regarding the process that is entailed when outsourcing, as well as how to decide what areas of your business to outsource. You can now start looking for the best service providers for the tasks you have ready to be completed.

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