Outsourcing. We’ve all heard of this business model that, over the past years, has grown from nothing to a multi-trillion US dollar business worldwide. It has become one of the most common practices applied by the most successful companies. But do we really know what it is? Do we know how it works? And most importantly, do we understand exactly why you should do it and how it can help your business grow? The answers to these questions are crucial to your company’s success!
“If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”
Lee Kuan Yew, Former Prime Minister of Singapore.
When it comes to outsourcing, there are both short and long answers. The short answer is that companies can grow to tremendous heights when accompanied by the right outsourcing partner. Their customer support, data management, and sales enablement departments basically take care of themselves. The long answer? Keep on reading.
So, What Is Outsourcing and Why You Should Do It ASAP?
It’s about time, to be honest. Outsourcing is pretty easy to grasp. Here’s the official definition: outsourcing is when a company hires a third party to perform tasks, handle operations or provide services. When a company outsources, they don’t have to worry about hiring and training employees. They also don’t have to bother buying any extra equipment – the outsourcing partner does this for them, too. Basically, outsourcing is an easy way to run processes your company is not an expert in. It allows businesses to reallocate resources and regain focus on the core functions. Some of the main activities a company usually outsources are customer support, data management, and sales enablement.
But there’s even a more important question here. Why is outsourcing so crucial for your company’s growth? The answer, again, is simple. With all the new trends, innovations, and requirements a company needs to succeed in a globalized world is hard work. It’s even harder than keeping up with the Kardashians. All jokes aside, outsourcing some of the company’s activities can be a great idea and a serious growth booster. You get a specialized team of experts at a fraction of the cost (no hiring or training necessary). You can increase your productivity levels, reduce overall costs, and lower your current workload. The way we see it, it’s a win-win.
What Are The Different Types Of Outsourcing?
Outsourcing comes in many shapes, sizes, and flavors. Each outsourcing type helps businesses increase their productivity while drastically reducing their costs. According to Nearshore Technology, the most common outsourcing categories are:
- Professional Outsourcing: This includes accounting, legal, purchasing, information technology (IT), and-/or administrative support, amongst other specialized services. It is one of the most common types of outsourcing since it can yield high-cost savings.
- IT Outsourcing: This subcontract ranges from software development to support and maintenance. An excellent example of this type of outsourcing (which most companies already do without realizing it’s actually outsourcing) is Gmail! Instead of developing your own email app, you just let Google handle the work! Pretty neat, huh?
- Manufacturing Outsourcing: This consists of hiring people outside your company to assemble an entire product or help you build its essential components. For example, believe it or not, Apple does not produce every aspect of its products by itself. What a shock, right? Instead, they employ other companies to create individual pieces. These manufacturers specialize in particular items, like screens, cameras, microphones, etc. By outsourcing this, they get expert manufacturing for each separate part, which elevates the overall value of their final products.
- Project Outsourcing: As its name implies, this type of outsourcing is meant for specific projects with a fixed duration. For example, if a company has issues managing or completing a particular project, they can kiss that problem goodbye by outsourcing! An outsourcing partner can handle the project from end to end, delivering outstanding results along the way.
- Process Outsourcing: This is when the third party is responsible for carrying out all operations related to a particular business function, AKA, processes! An example of this could be anything related to payroll, lead generation, accounting, telemarketing, customer support, social media marketing, and more!
You can basically outsource anything your company does! As time and business move forward, other types of outsourcing have come to the table. Outsourcing On Demand is an excellent example: you get complete customer support projects or experiments at a fixed price, timeline, & budget. No more cookie-cutter approaches; everything is personalized to your business’s needs!
What Are The Advantages Of Outsourcing?
Outsourcing has become so popular because of all the benefits a company can get from it. Among other things, it can help free up your time, reach your KPIs, boost growth, and even reduce costs. It almost sounds too good to be true! Below, we outline some of the advantages that outsourcing can bring to any business.
You Can Focus On Your Main Activities
By outsourcing, you have the opportunity to focus on your core business activities. You know, those that make you profitable without sacrificing quality or service. When you outsource, supporting or secondary processes, you’re able to focus on what you do best and matters the most to your company.
For example, let’s say you need to launch a marketing campaign to increase sales or present a new product, but you don’t have the staff on board to make that happen. In this instance, hiring a third party to manage your marketing for this specific project makes more sense than starting the long process of interviews, hiring, and training. Outsourcing can provide you time to focus on your main activities, meaning you don’t have to waste time, energy, and resources by creating a new department.
It Helps Your Company Grow Faster
Outsourcing is the key if the cost of expanding your company is too expensive. It is a great way to keep the growth curve pointing upward without any obstacles that can hold your company back. For example, hiring a firm specializing in what you need will be faster and cheaper than hiring additional skilled staff or training existing workers while still increasing the benefit to your customers.
You Can Increase Your Flexibility
If your company needs to bring in additional resources, but just for a specific amount of time, outsourcing allows you to bring more people to the team when you need them and then release them when things slow down. For example, say you need to increase your customer support during a busy sales period (like Black Friday or Cyber Monday). Hiring an outsourcing partner that can help you scale for business for this period and keep it running, your customers happy, and your support tickets handled. In short, it’s a great way to scale up while keeping your customers happy!
You Can Promote Innovation In Your Company
Driving innovation is difficult, especially if you’re always caught up in your business’s day-to-day. Outsourcing can help free up your time in ways you never imagined. If you have an EdTech business, you can discover ways to make students’ projects easier to manage, improve your homework platform, implement certification strategies for your teachers, and more.
If you’re a SaaS (Software as a Service), then you have more time to run beta tests, discover customer pain points (and ways to address them!), and find a constant iteration process. All thanks to one common element: free time!
You Will Have Access To Leading Technology
Why invest a lot of money in technology that you may not need or aren’t very familiar with when you can simply outsource a team that specializes in that area that already has the technology you need (and the expertise to use it)? By outsourcing, you get access to the best technologies your projects need – without the costly expenses.
You Can Have Access To Expert Knowledge
“Master your strengths, outsource your weaknesses.”
Ryan Khan, Founder of The Hired Group
Your in-house team might be great at what they do, but some tasks require specific skills and knowledge – be it skills they may not currently have or even skills they could hone given enough time and resources. But when you outsource your weaknesses, you get professional experts that can usually finish the job faster and with a higher standard – all of this at a fraction of the cost.
For example, if you need help increasing your lead generation or implementing CRM skills but aren’t sure how to go about it, an outsourcing company (such as Boldr… wink, wink) can help you out! Or maybe you don’t have time to review your analytics and find key data insights (surprise, we do that too!) Expert knowledge, at the drop of a hat. All through high-quality outsourcing.
You Can Work Around The Clock
Working 24/7 can become a reality when you have an outsourcing partner. It’s one of the most significant benefits outsourcing can provide. By letting your partner handle part of your workload, you will be able to stay live in different time zones or even during holidays. The key takeaway is that your business could be running at all times, even while you are asleep! That’s a huge competitive advantage.
You, Will, Minimize Your Company’s Risks
Risky Business as in the film, great. Risky business as in your own time and resources, not so much. By outsourcing and leaving it to the experts, you minimize your company’s risks. After all, the people you’re hiring know what they’re doing, meaning they are more aware of the risks involved in each task. And therefore can work in the safest environment possible. No risking your business here.
You Can Enter New (And Exciting!) Industries
Ever thought about branching out? By subcontracting other companies, you can complement your current offer with adjoining services or products. This means you will be able to offer more services than you originally thought, covering new and exciting industries For example, if a shoe company is looking to expand their product offer to other accessories, then an outsourcing partner could be the best choice to accomplish this.
You Will Lower Your Costs!
This is perhaps our favorite benefit. After all, who doesn’t love a good sale? Lowering your costs is the most outstanding benefit outsourcing can provide. It allows you to get the job done at a fraction of the cost – and in a much more efficient way. Outsourcing can save you money include hiring, training, infrastructure, office space, salaries, taxes, and more. As you can see, we’re not talking about pocket change here… Outsourcing is the only bargain deal where everyone comes out winning.
To summarize, outsourcing is one of the most effective models to obtain profitable business operations. It can bring multiple benefits to any business, including cost reduction and other competitive advantages. And it’s not only just becoming a popular way to do business, but it’s even becoming necessary to expand and continue growing in this globalized world.
Is Outsourcing The Right Choice For Your Company?
Outsourcing may not be for everyone. Each business owner should evaluate their business’s specific situation and decide if the benefits outweigh the risks of handing over control of their process to another company.
Bear in mind that the right type of outsourcing also depends on finding the right partner. You need to consider security, commitment, tools utilized, and even previous user reviews. So if you’re on the verge of becoming an outsource, then here are a few tips on how to find the perfect outsourcing partner for your company.
How To Select The Right Partner To Provide The Services You Need?
Let’s make one thing clear: not all outsourcing service providers are the right fit for your projects; according to Business.com, there are a few steps you can follow to ensure you hire the best outsourcing company for your specific needs:
Make Sure Your Partner Understands You
Odd as it may sound, this is similar to dating! You want to ensure your SO understands your needs, your goals, and your dreams. So, the first step for selecting your outsourcing partner is to know yourself first. What are your needs? Your KPIs? Your determining factors for success? The tools that you use? Your expected results? Knowing this ahead of time allows you to find the right outsourcing partner because you have already defined the goal you want to achieve by hiring them.
For example, if you share vague requirements to your outsourcing partner, like “I want to create a new webpage for my company,” an outsourcing partner will create a webpage. But it might not have all the tools, information, and specific requirements that you expected. The instructions were not detailed enough. In order to receive the best results from the partnership with an outsourcing company, it’s essential to be extra specific about what you want to achieve with the association. After all, communication is the soul of any business.
Define Your Budget
Next, you need to determine how much money you can spend on this project before approaching your outsourcing candidates. Even though outsourcing can save you a lot of money, superior, high-quality services can have a higher cost. So it’s extremely important that you have a defined budget in mind before starting. Think of it this way: clear budgets, clear outsourcing proposals.
Weigh Your Options
After defining what you need from the outsourcing partner, we recommend reaching out to different outsourcing companies and reviewing their offers. Pros and cons are your best friend here. Once you have this data, you can start evaluating them based on technical expertise, experience in solving other cases similar to yours, access to technology, skill sets, and most importantly, how much they care about your project!
Find Common Ground
Even though it is often overlooked, a shared passion for your project is key to a good association. Ensure the outsourcing company you choose is committed to making your project a top priority. The ideal partner is the one that adapts to your needs and concerns, so look for a company that can work alongside your organization to elevate your brand and have long-term results in the marketplace.
“It is possible to have a successful, ethical, caring, and fair paying third party support team. I know this because we work with one. So I get it. I understand if you’re hesitant. Thanks for being weary, and for doing your research. But you won’t find any of those red flags at Boldr.”
Caillin Grosse, Customer Support Operations Manager at GasBuddy
Obviously, selecting an outsourcing service provider is a process in itself. But when taken with purpose and strategy, the result is discovering the best fit for your company. Never forget – you should always keep in mind the goal you need to achieve to make the right decision while selecting your outsourcing partner.
The Takeaway: Why You Need Outsourcing ASAP
Outsourcing truly is a life-saver when it comes to the corporate world. When used correctly, it can help keep your business afloat, free up your time, and reduce costs. It allows you to offer expert services at a fraction of the cost, while also helping keep your business booming and your clients happy. So yes, outsourcing is necessary. And every company should implement it (in one way or another) as soon as possible.
At Boldr, we’re focused on outsourcing. Just not in the way you might be familiar with. We’re client-focused and impact-driven. This means that our clients’ needs become our own, their KPIs dictate our processes, and their tools are the ones we use as well. And it also means that we’re focused on making a difference in the world. We give back a percentage of our profits to different NGOs to improve our communities.
“Purpose-driven outsourcing is really nothing more than giving people career paths and not tasks, taking care of them, and investing in the communities where we live and work. And it’s transformative because it helps companies rethink what can be outsourced, because you start thinking bigger, but it also rethinks and reimagines what outsourcing could be, which is a positive force for the environment and the community.”
Suneet Bhatt, President and Board Chair at Boldr.
Anywho, enough about us. Are you ready to start your outsourcing journey? Check out our different services or take a 5-question quiz to see if your next project would benefit from outsourcing (spoiler alert, it will!).