Many companies could benefit quite considerably from outsourcing processes. This is because there are advantages that can be enjoyed which result in an increased bottom line and decreased management stress. Understanding the gains of outsourcing processes and how best to mitigate possible risks is the starting point for doing this.
How Outsourcing Helps Businesses
Outsourcing processes is a perceptive way to fill a business gap. It addresses a need for resources while minimising the stress of overseeing the completion of a job or process.
Outsourcing involves accessing the expertise of contractors. The team or individual employed to do a job is contracted and therefore not under a company’s direct control. This has the advantage of freeing up management and in-house teams to focus on core business.
Practically outsourcing enables multiple processes or tasks to be simultaneously undertaken. As such productivity and efficiencies can be maximised. Furthermore, by engaging in an outsourcing strategy, a company does not have to increase its internal capacity or infrastructure while improving productivity.
Will Outsourcing Grow in the Future
To remain competitive and relevant companies need to make sure that they do not experience a pause or break in their services. In a world in which remote working has increased significantly, outsourcing processes will continue to make sense. Research shows that the trend to outsource reached $USD261.9 billion in 2022. Furthermore, it is forecast that choosing to outsource processes will continue into the foreseeable future.
What to Outsource
Outsourcing is results driven. Thus, contractors are employed to produce a piece of work or complete a process or task that fulfils a specific company objective or need.
One of the points of outsourcing activities is often so that the company can increase its focus on core activities. The result of this is that a business can focus on its strengths and thereby increase its effectiveness. Therefore, activities which don’t require direct company supervision or are repetitive and can’t be automated are ideal to outsource.
A task which requires a speciality to complete is also good to outsource. Third parties who have a narrow and thereby specialised skill set can often render a task more efficiently than general experts. This means outsourcing can result in improved productivity and efficiency gains as well as produce a better-quality output. The result of this is often a greater competitive advantage as expertise can be leveraged across a supply chain process.
When a procedure involves a selective set of skills that are not an ongoing requirement, they are often best attained through outsourcing. By outsourcing, a company can access expertise to accomplish something without engaging in in-house complexities and time-consuming requirements. Thus, it also enables a company to curtail employment costs in the longer run.
10 Business Processes to Outsource
- Ongoing and Repetitive, non-automated, Administrative Tasks, such as bookkeeping or compiling data.
- Engineering and Architectural design.
- IT Managed support services
- Digital Marketing.
- Graphic design.
- Social Media Management.
- Cold Calling and Telemarketing.
- Software Development.
- Shipping and Logistics.
- Human Resources, for example, hiring and onboarding.
What Not to Outsource
There is a time and a place for outsourcing, especially when there is a gap to fill and little capacity to do so. However, while many things can be successfully outsourced, there are some functions which shouldn’t be considered for outsourcing. These are three areas in which a company should not outsource.
Three Tasks Not to Outsource
1. Primary Functions
A company should never outsource its primary functions. There are multiple reasons for this, one of them is that no one is invested in a company’s business to the extent they are. Core functions are activities and processes around which the company is built. One of the aims of outsourcing should be to strengthen core functions by creating more time to focus on them. Thus, to become or remain successful a company should not outsource anything that can directly impact its success. Or render it superfluous.
2. Confidential or Risk-Creating Processes
A company should not outsource activities and processes which involve sensitive information or highly confidential industry data. Therefore it is also unwise to outsource anything that could create a security risk at or for the company. This is because, despite Non-Disclosure Agreements (NDA) and Restraints of Trade Agreements (RTA), freelance consultants and agencies often can still work across a specific industry. And are therefore theoretically able to work for two competing companies. This is especially true within an international context.
3. Final Decisions
A company should also never outsource the final say on who gets hired. It is recommendable to work with an expert outsourcing company to be advantaged from their advice and support. However, the final decision on who gets hired for a job should never be outsourced to them. It should remain within the company’s control. This is because no one else can be surer of a candidate being able to successfully fulfil their requirements.
How to Outsource
The world is your oyster when it comes to outsourcing. Once a company decides to embark on an outsourcing approach, it can hire a third party based anywhere in the world. This makes the process of outsourcing exciting but also daunting and where risks need to be managed.
The most cost-effective and productive way to outsource is through an outsourcing partner. Ideally, this is a company that has a long-standing and reputable record of outsourcing success. Practically, an outsourcing company should assist in spec’ing a job, recruiting candidates, and onboarding after hiring. To lubricate out-of-country payroll processes, an outsourcing partner should also be able to oversee invoicing third parties.
The Key Recruitment Agency has over 40 years of reputable experience in helping companies increase their capacity. We offer a complimentary consultation to discuss a company’s needs and how best we can assist in helping them fill skill gaps. Thereafter, a bespoke package, without hidden costs and minimising risk, is presented to our clients. We also offer an onboarding and payroll service to make transacting between countries easier and less costly. Contact us today to find out more about how we can assist your company outsource.