Outsourcing, a time-tested strategy, has been a cornerstone of business growth for many years and will continue to be so in the future. It’s a proven way to maximize your business’s potential and efficiency, and many business owners will attest to its value to them personally and professionally.
And while statistics show that 35% of businesses don’t outsource anything at all, the theory suggests that 66% do outsource at least one function.
When it comes to outsourcing, there’s no one-size-fits-all solution. The decision of what to outsource and what to keep in-house is highly specific to your industry and business. It’s not about following trends but about making strategic decisions that work for your unique situation.
While there are indeed many warnings you need to heed when outsourcing, there is a fine line between beneficial and detrimental in relation to outsourcing; there will be some signs you could bring in a third party to assist you in delivering higher standards and quantifiable results that accelerate what you do and how you do it.
However, you mustn’t choose your outsourcing partners based on finances alone. This, of course, should play a significant part in your choice, but you need to focus on the value it can bring rather than the financial costs. Doing this enables you to see the investments in the company you are making, not just see outsourcing as another expense. You need to stump for every month or year.
Let’s take a closer look at some indicators that you might benefit from outsourcing a particular task.
You Need Innovation
Outsourcing to innovative service providers can be a game-changer for your business. These providers are often at the forefront of their fields, bringing fresh ideas and proven track records of innovation. This can free up your time and resources, allowing you to focus on other aspects of your business.
The reality is that if you’re not pushing for innovation, you will eventually stagnate where you are, and you need to be able to evolve with the times and changes in consumer demands and technological advances in the sector. And if this applies to you, then outsourcing to a freelancer or dedicated R&D company can help you to keep moving forward in the right way without stretching yourself too thin.
Inability to Complete Specialized Tasks
There will be many tasks without different businesses that require a specialized touch. This might be because you don’t have the skillset yourself or within your team to complete the task at hand effectively or efficiently, or you aren’t getting the right results.
These specialized tasks vary across different industries, but some great examples that many businesses will come across in relation to outsourcing specialized areas include the digital marketing sector, specifically paid ads; it might be outsourced bookkeeping services to help them balance the books and keep their finances in check, or you might need to outsource legal aspects to help you stay compliant and operations legally. Identify those tasks for which you don’t quite have the in-house skills, and look at your outsourcing options.
Cost Effective
Do you have the right setup and team to help you undertake the task in-house? If there is no advantage to compiling a department to carry out the tasks running in-house alongside your team, and including them in their daily activities, but they need to be done, then it’s time to look into outsourcing.
It might be that you find outsourcing your IT needs more cost-effective than purchasing the equipment, setting up, and attending a team to handle this part of the company for you is too expensive, but using an already existing service with expert staff and skills works better for you. Again, you can apply this to any area that is costly to incorporate. It might be you outsource HR instead of hiring HR managers and team members, you can outsource bookkeeping instead of hiring someone to complete it and adding them to your payroll, or you might find that cybersecurity outsourcing is optimal for you as the cost of implementing robust policies and technology can can be outside of your budget.
Scaling Too Fast
Scaling too fast can often be seen as a problem as you might not have the capacity to handle the extra work this can produce. Outsourcing can be your strategic partner to help you scale faster than anticipated. If you need to capitalize on demand or you need to provide what you do on a larger scale, you need to bring people on board who can help you reach your goals without letting standards drop. Don’t worry about the added expense associated with this; consider it an investment because if you manage to push through with increasing your capacity and end what you do, you can generate more revenue and reap the rewards of your hard work and then move forward with long term plans and partnerships that can provide support and value for what you do.
Wasting Resources
You need to understand how much each task your employees or users are costing you and the output. There could be a lot of wasted resources if you aren’t on top of the very high costs of the processes you perform. If the figures aren’t working out and you are wasting too much money, you might find it easier to readdress what to do and who you use to find other partners who can help you do what you need to do but at a better price. Neglecting to focus on this area can result in slower growth, higher costs to consumers, and lower wages, and these can be the perfect storm for a downward spiral. Instead, look at what you are doing and identify if you can make changes that reduce the daily production rate for essential operations to save you money without cutting corners.
You’re Behind
Meeting deadlines is crucial for running a successful business. If you’re falling behind, consider outsourcing to ensure you can handle your workload and meet your required targets and deadlines. This can help you regain control and reduce stress in your business operations.
If you’re noticing a pattern of falling behind on deadlines, or you know you’ll be late or lack the capacity to handle certain aspects of projects, then you need to consider outsourcing as far ahead as possible to help you get things back on track.
Outsourcing non-core tasks can be a game-changer in meeting deadlines and delivering on your promises. It frees up your time to focus on what truly matters, making your operations more efficient and productive.
You’re Maxed Out
Whether this is on skills or on creativity, if you and your team are at the top of your abilities, and skill set, you need help. Whether it’s on a one-off basis or ad hoc to help you out from time to time, or you have an ongoing partnership you rely on to help you run your business, you need to look at where parts of what you do that currently exceed your capabilities and outsource this so you don’t need to compromise on what you do.
Time-Consuming
While this aspect can indeed come under waste, any time-consuming task should be at the top of the pile for consideration for outsourcing. The reason is that you are taking time away from other tasks you need to be doing by focusing on time-intensive aspects of running your company. Whether this is HR payroll, managing team, accounting, etc., if you’re spending more time than you want or should be in this area, then identify it for outsourcing and consider your options. You can opt to work with a freelancer on a semi-regular basis to help you cut down on the time you spend doing the task. You can use a full-time service that ultimately oversees all instances of carrying this workout, but if it’s eating into your day or week, get it outsourced and assess the benefits of doing so.
Getting outsourcing right can be tricky. While some businesses will only need to outsource one function, others, especially more prominent enterprises, can outsource multiple takes without losing proficiency or agency over their own company. Take the time to sit down and evaluate what you need, how you are currently meeting those needs, and what type of outsourcing partnership will benefit you. Talk to suppliers, ask the right questions, get demonstrations, and ask for free trials to help you understand what you can expect and the benefits on offer. Even if you take your item and go through multiple vendors to find the right partnership, it’s worth persevering to get it right; the success of your business will depend on it.
