benefits of outsourcing
Business Tips

Benefits & Risks of Outsourcing

Whether you love what you do or hate it, you know that being a business leader brings a lot of tough decisions. You have to think about whether you are going to weather it all alone, or whether you are going to expand and bring people on board to weather the storms of business with you. It’s a big decision to make and not every business owner is okay with outsourcing to others

How Technology Enables Effective Outsourcing

A business owner will often think that they can do it all. Largely, business owners really can do it all because they are the ones that have come up with the concept for their business and they know exactly how it’s going to be run. The problem is that trying to do it all can lead you to drowning and instead of going that way, you can make it easier on yourself by outsourcing.

Whether you are choosing to outsource with your IT services or you look for your graphic design team on the other side of the planet, you need to consider how outsourcing can make a big difference in a positive way to your business. You want to recognize that there are lots of different hours in the day, and there are only so many of them that you can do things by yourself. Instead of thinking that you have to go alone, why not share the load and learn to outsource with others?


What are the Benefits of Outsourcing

Outsourcing leads to you hiring outside the business, and usually it’s for a temporary or limited basis. If your funds don’t stretch to hiring somebody full time within the business itself, you may want to outsource to gain the expertise of others and not have to worry about trying to get your tasks finished.

Technology has progressed in such a way that businesses have a monumental edge when it comes to remote work. If you’re able to hire outsourced individuals, it means that you are arriving in a space where your business is flexible enough and green enough to do so. 

Understanding the benefits as well as the risks of outsourcing can really help you to push your business forward and propel you into a space you may never have thought you could go. With that in mind, we’ve put together a big list of some of the best reasons you should outsource, as well as the risks, so that you can understand what you’re getting into. Let’s take a look at all of these reasons and risks below.

You can easily manage your costs

When you don’t have to pay a fixed monthly wage to a full time worker, you can save money and keep an eye on what your costs are rather than have to pay out for holiday entitlement, pension plans and more. It’s nice to be able to pay a fixed monthly wage to a full time worker, but when you don’t have that type of capital at the start of your business, you need to think of another way around it.

You still need to have some help and research has shown that outsourcing is a cost effective way for small businesses to get that help. Because you no longer need to worry about paying operating costs associated with workers compensation, you’re going to save yourself a bunch of cash overtime.

You gain that competitive edge

You want to be ahead of the game in your industry, and as a small business owner, finding that competitive edge is important. With the help of remote workers and all of their knowledge, you can ensure that you are bringing people together and bringing your business to a more positive place. Remote workers can be scattered across different cities, states or even countries. But when you manage this well, your small business is going to have the same access to the same level of talent as any of the big enterprises out there.

More time for more projects

If a lack of people is holding you back, then you need to think about how you can expand your range as a business owner. One of the biggest upsides of outsourcing is the chance for your business to innovate. This means that you can kick off your projects far more frequently and with on the spot expertise that outsourcing can provide. You’ll be able to manage your time better and you won’t have to worry about going through the rigmarole of employing, hiring, and training others.

There is high motivation in outsourced workers

Third party providers, such as outsourced remote workers, are far more motivated in their roles. They are being paid as a contractor rather than as a full time employee, which means that without your role for them that is available, they are not going to get paid for the work. Contracted workers are usually more enthusiastic and motivated to do a great job so that they can obtain the right references and give the best feedback. If a worker is lacking the expertise required for a job, the fact that you can outsource it to somebody who knows better is important.

You get to focus on the things that you can do well

Being able to focus on your core competencies as a business owner is important. Being able to target the skills that make your company unique will help you to grow your business in a way that you never thought possible. It gives you something that makes it stand out from the competition. The strategic advantage of a business when using pooled resources or outsourced workers is going to make a massive difference to the way in which your business is run.


You can make excellent changes

Outsourced workers are able to provide a business with the opportunity to transformational change. This radically reshapes the business and its strategy and improves the organizational culture. While your business is transitioning, you can use outsourced specialist skills to affect and manage change that really matters.

You get a step up

Sometimes a small business needs a boost and outsourced workers can really help with that. Rarely does a small business owner have the opportunity to carry the same clout as a large enterprise. But when you choose to outsource, you are going to be able to carry that clout with ease.

It improves how quickly you can go to market

Your business is likely operating in a very competitive environment and speed to market is critical here, whether it’s purchasing specialist equipment or training new staff. It’s going to take time. The cost of acquiring those new skills and equipment will often defeat the pursuit of speed, and outsourcing can give you an effective solution when these circumstances appear.

Mitigating business risks

When you outsource your projects, your processes, or your campaigns to an expert in their field, you’re going to access their ability to foresee complexities and mitigate those risks as they appear. Because outsourced workers have knowledge that you don’t have, you can rely on their expertise and know that they are going to give you the right feedback.


What about the risks?

With any positive there is a negative and there are some risks of outsourcing that you have to consider. The benefits of outsourcing, as you can see, are many, but handing over direct control of a business function can be a nerve wracking time for a small business owner. Some of the risks include:

Service delivery issues

If there hasn’t been the correct handover instructions, or if there hasn’t been the right guidance, you might find that the outsourcing party isn’t up to the task as you think they were. Service standards can therefore fall behind time or below your expectations, and then the work has to be restarted again, which isn’t going to help you with your time or money management.

Confidentiality issues

Every single business holds information that is sensitive. Depending on the type and the number of outsourced workers, your level of confidentiality may not be as great as you think it is. It’s important to ensure that you are choosing to write up contracts that keep confidentiality at the forefront.

Flexibility issues

If the circumstances in either the outsourcing party or the business changes, the conditions of the contract may not be as flexible as they once were. You need to maintain some flexibility when you’re outsourcing because you want to ensure that the people you are outsourcing to are able to keep up with what you are doing.

Changes in management

Should management changes happen in your business or the business itself close, this is going to pose a problem with the outsourced parties. You don’t want to have any potential risks to your business, so you need to ensure that you are on top of this as much as possible and that any potential changes in management are noted from the beginning. 

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