The Benefits of Outsourcing

What is outsourcing in Business? According to, “outsourcing is the business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company’s own employees and staff.”

You probably find that you outsource on a day-to-day basis without really thinking about it – do you have a gardener, a cleaner, a dog walker or maybe use an ironing service? All these are examples of tasks we outsource on a regular basis to give ourselves more free time.  This basic principle can be seen as a strategic decision in the business world with focus on carrying out value-adding activities.  Outsourcing can bring with it many benefits. Let’s have a look at some of these.

Access to a skilled workforce – By outsourcing, you will not need to invest time in recruiting and training expensive resources for your business. You will have access to highly skilled professionals who are able to meet your business needs.

Cost advantages – Many businesses outsource as a way to realise cost savings or to apply tighter control measures over the outsourced function.  By outsourcing, businesses can have an outsourced partner within their business rather than an employee therefore saving money on everything from benefits and training. In addition, you will only be paying an outsourced partner for their hours worked – there is no sick pay or holiday pay to consider.

Increased efficiency – An outsourced partner specialises within a given area so there will be an increase in efficiency. This outsourced partner will know their business and will work with you to make sure they maximise their output.

Save on infrastructure and technology – Outsourcing eliminates the need for investment in infrastructure and technology as the outsourced partner will take on responsibility for these.

Of course with every benefit comes potential downfalls.  Outsourcing could create the following issues:

  • Creating redundancies within your workforce
  • Current staff may feel threatened or disposable
  • It may lead to a loss of control of policies and procedures
  • Potential threats to data security

What do you need in order to outsource successfully?

In order to ensure that outsourcing is effective, both parties need to be aligned.  There needs to be complete clarity concerning the company and their goals.  Any business looking to outsource needs to ensure that their outsourced partner understands their operating environment and the strategic vision of the business.

Consideration must be made around your selection for an outsourced partner. Question if they can meet your businesses needs and look at how they will integrate. Look at the contract they present you with, how is this formed? Never work without that contract in place.

Finally, for me, a critical function to ensuring a great outsourcing partnership is that of relationship management.  In order to successfully deliver an outsourced function to the level that is expected (and to exceed this), communication is key.  Issues in an outsourced partnership can arise from miscommunication, not knowing or understanding the business requirements, ambiguity or inconsistency.  Keep the lines of communication open and ensure outsourced partners know of any new challenges and how this is going to impact on their function.  Have progress meetings and don’t be afraid to pick up the phone.  If you feel there are “grey areas” then clarify what the meaning is. Ambiguity will send either party off on the wrong track and help no one! And finally, consistency is key.  Any feeling of unfairness will impact on your partnership and the relationship will suffer.

Do you feel that your business could benefit from outsourcing? Do you have the need for administration support and is this something I could help with? Have a read of my previous blog post “Why Hire a Virtual Assistant”  to see if this is a function you would benefit from outsourcing.

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