Like many a flustered wedding speech, we’d like to start with a definition of a core concept (outsourcing) within the broader context (business).
As pivotal as love is to marriage, so is outsourcing recognized as the key to competitive businesses. Due to its increasing importance as a strategy for growth, there is no doubt it should be part of the vocabulary of every modern entrepreneur.
But if you’re new to the idea or new to business altogether, you might ask: what is outsourcing, and is it for you?
What is the Definition of Outsourcing?
Simply put, outsourcing is defined as the hiring of third-party agencies or individuals to conduct specific tasks and processes for you for a specified amount of time. In the context of business, it can also be called business process outsourcing (BPO).
What Does Outsourcing Mean for Your Business?
You might have been avoiding looking into outsourcing any processes for your business, thinking of it only as an option for larger businesses.
But think about it this way– even when you’re just starting a business as small as a one-person bakery, there are already a number of tasks that need your attention. You have to be mindful of store management, social media management, order fulfillment, accounting – all while focusing on baking, the actual passion that led you to open up shop!
Not only can this be unsustainable, but it also affects the number of products, and thus profit you can produce when it cuts into your operation time. You run the risk of losing out customers to a shop down the street that happens to have the workforce to sell and serve more.
This is why, as an small business, start-up, or large enterprise, you need help, and at a cost that fits your budget. In fact, according to a survey, 37% of small businesses currently outsource business processes. This idea of competitive advantage is also at the core of most outsourcing decisions. Everyone is moving towards rising above the competition and transitioning to disruptive or automated processes. With outsourcing, you can easily provide the same quality and volume of service as a larger competitor.
How to Outsource
Once you’ve decided that you’re ready to hand a bit of the work to someone else, make sure to first get the basics down pat. The next step is to figure out which processes you can outsource effectively.
These days you can find everything on the internet, and that includes just about any outsourced service you can think of. For example, bookkeeping, social media management (SMM), and customer service are all tasks that you can easily outsource. If you’re a smaller business with lower volumes, you can even find just one competent person to fulfill all these roles when you hire an exclusive “virtual assistant (VA).”
As an example of commonly outsourced services, many steps of product development can be outsourced as well. Researchers can source products from the competition and study the market to find your next bestseller. You can source a manufacturer to make a prototype. Marketing tasks, from branding to selling, can be handled by outsourced graphic designers and copywriters. The possibilities are endless.
When you don’t have the time to interview individuals for multiple roles (think larger customer support teams), there are even business process outsourcers– like Concert8 – that can handle the bulk of the work for you. From interviewing to vetting and hiring candidates, and managing your outsourced staff on a day to day basis, a larger BPO can help you through the entire process.
The Advantages of Outsourcing
Supply and demand rule most business decisions, and this is no exception. With the boom of the start-up industry, more companies need exceptional talent to fill their rank. These talents become highly in demand and, therefore, their rates could skyrocket past your budget constraints in a blink.
One of the main advantages of outsourcing has always been its considerably lower cost. Depending on the nature of your business, there are some jobs that you might not need year-round. Hiring the occasional expert freelancer, perhaps from a country with a lower cost of living, can save you quite a bit.
In general, though, cutting back on your own responsibilities or focusing the workload of your employees affords you with more opportunities to expand and enhance special skills, while reducing your risk of oversight.
The Disadvantages of Outsourcing
Depending on your stance, there are two or three problems that might stop you from considering this strategy. We’re sure you’re thinking not just of the pros of outsourcing, but also the cons. One is that it might be valuable for your brand to exclusively hire local talent to help reduce unemployment in your nation.
Though, more likely, you’d be concerned about the risks of outsourcing, one being the issue of trust—whether you can trust your temporary hires to keep confidential data strictly confidential. And, whether or not they’ll properly fulfill your tasks when you might not have any means to monitor them.
Solutions to Outsourcing Concerns
If you have any doubts, do your research and hire the right outsourcer to eliminate these concerns, and start small. Firstly, to eliminate data confidentiality issues, you can find an outsourcer that is open to sharing the existing security measures they have in place, and any industry specific measures they are willing and able to implement for you. And for task fulfillment, speak to established outsourcers with experienced quality assurance (QA) that can monitor your agent(s) performance. Get involved in the training and onboarding process and make sure to set your performance expectations with team leaders, QAs and trainers.
We’d be happy to help answer any more questions you might have about outsourcing- just send us an email or check out our live chat!