Outsourcing has shown exponential growth signs ever since the Pandemic shook up our traditional working methods.
And it is not a surprise that in this fast-paced world, certain startups and companies don’t have the structure or skills in-house. So, they look for external expertise to outperform their results.
According to Statista, IT outsourcing is expected to have a compounded annual growth rate of 8,8% until 2026. Moreover, it is considered one of the biggest trends for startups in 2022 in this Forbes article.
Deloitte reports in this study about outsourcing that IT, Finances, HR, and Payroll remain the top functions performed through outsourcing or service-shared centres.
In a study referred by Fortunly, almost 54% of all companies use third-party support teams to connect with customers, and 78% of businesses worldwide feel positive about their outsourcing partners.
This gives a sense of the impact and the positive aspect of this fairly new business strategy. Now, let’s find out more about outsourcing, its benefits and best practices.
What Outsourcing is?
According to Investopedia, outsourcing is the “business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff”.
To clarify, a company is outsourcing when contracting the services of an external organization, team, or freelancer talent. Curiously, Outsourcing was recognized as a business strategy in 1989.
It is a practice used by companies as a cost-cutting measure. But, many more benefits are considered to outsource functions, tasks, or business processes.
Why do companies choose to outsource?
Outsourcing is one of the best ways to grow your business by accomplishing more in less time.
In a Forbes article, Joanna Swash, CEO of Moneypenny, confirms that “Many businesses outsourced their phones, Live Chat, and receptions during the pandemic, and realized the benefits in terms of cost and efficiency.”
Outsourcing helps reduce or control costs.
Cost-effectiveness is the main reason businesses outsource, either to reduce their overheads or labour costs by a significant margin. For instance, a Deloitte study shows that 88% of the respondents achieved the intended cost reduction.
In truth, you can save as you don’t require hiring and training people for the needed expertise. Moreover, you find contractors with competitive prices around the world.
Outsourcing gives access to expertise and resources unavailable internally.
You get the best results when you collaborate with specialized world-class talent and experts matched for the job.
Furthermore, by outsourcing, you get access to world-class manpower to generate results accurately and for a fraction of the time. From an international perspective, you get the capacity to answer in multiple languages by subcontracting people around the world.
Outsourcing improves efficiency and productivity.
The efficiency and productivity of your staff increase by outsourcing non-core and time-consuming operations and functions. Deloitte found out that Outsourcing helped 78% of the companies achieve standardization and process efficiency.
To sum up, with more time and resources in-house, your team increases productivity and completes tasks and projects faster.
Outsourcing empowers the focus on core functions and flexibility.
Outsourcing enables businesses to strategize their time and wisely utilize their resources to focus on core functions. And you don’t have to use your equipment or facilities.
Also, an external vendor gives you the flexibility to shift focus and allocate internal resources as business priorities change. If you have a team tailored to deliver high results in specific areas, you can outsource others.
Outsourcing accelerates company transformation and time to market.
By outsourcing, you have manpower helping you to transform your company faster. Also, you can accelerate the production and commercialization of any product or service. Moreover, experts might help uncover new opportunities or expand to new markets faster and with more agility than your competition.
From IT outsourcing services to outsourcing software development and customer success teams, you can identify which areas you need expertise in for the benefit of your business. However, take a look at the best practices to outsource successfully.
What are the best practices to outsource?
The goal is to free time and resources to focus on key internal aspects that will empower your growth. Recalling Tim Ferriss, author of the book 4 Hours work week, every delegated or outsourced task must be time-consuming and well-defined.
Define services, functions or tasks you require to outsource
Make a list of daily tasks within your team or your routine, you perform in-house. Afterwards, select the tasks or services that are the most time-consuming or require expertise you don’t have in-house.
Above all, remember that you can outsource tasks from different departments of your business, such as marketing & communication, IT Support, graphic design services, and so on.
Assure your key tasks
Some given tasks are crucial and hard to replace as if something misses, you get some company struggles. That means the service demands availability, consistency, and a constant workflow.
To assure you have a timely work delivery, we recommend long-term agreements with your next team member. It happens you can hire freelancers to work on your project for one year or to only focus on your company.
Define a clear process to hire the right people
As you are looking for someone to collaborate with you, it’s crucial to find people in alignment with your project and with the right expertise.
So, ask for recommendations, look into a talent pool or create a job listing that will attract the right talent.
For instance: make a shortlist of the best candidates after assessing portfolios and projects. Make time for meaningful, in-depth interviews. Get personal, and understand what makes their day different or what is success to them. Ask about their motivations, passions and desired impact in the world. You might find common interests that can empower a stronger company culture.
Finally, start with a small task to test their expertise and workflow aligns with the assignment. Start small and grow responsibilities as you feel comfortable.
Communicate your project expectations
With the best alignment, you’ll get the best results.
Present clearly the essence of your company, values, and mission. Do it through a brand book or an onboarding presentation. Also, share how the assignment will empower the positive impact and mission of the company.
Write down a briefing/scope of work document to set up the collaboration expectations on the goals, tasks, and deliverables for better onboarding.
Pay attention to security
You might be sharing crucial data with suppliers that must be handled carefully.
If your supplier will use in-house software, social networks, or websites, create specific access accounts with levels of access. Create strong password management or sign a contract that prevents any breach, leaks, or data usage.
Set collaboration rules
As you are outsourcing, the collaboration must be efficient and smooth.
One thing to always consider is the time zone difference. Hence, use 24 timezones to find the best hours to do a daily wrap-up or set up a weekly status point meeting. Also, use google calendar to book it at the right time.
For short and straightforward meetings, define clear agendas with a limited time. Both times are valuable, so respect it.
Share a “do’s” and “don’ts” document to share how you envision a successful collaboration. Moreover, share your communication preferences according to the topic/task inside the brief/scope of work document. Define the one person in charge to directly contact the external talent.
Now you have everything to start outsourcing your tasks or services and manage a freelancer.
Grow and pivot your business faster.
In a short sentence on the same Forbes article, Joanna affirms that businesses can grow, innovate and pivot faster. Moreover, she shares that organizations become more competitive in this constantly changing and evolving business environment with the outsourcing model.
Outsourcing can be the solution to reduce costs, access to qualified experts, and/or accelerate your time to market.
Social impact startups and purpose-driven organizations are gaining flexibility, agility, and scaling up with the help of freelance platforms like Work for Impact.
It’s time to focus on helping you grow and innovate your business faster.
Ready to start expanding your team internationally in just a few steps?
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