Before the pandemic, many businesses couldn’t imagine the idea of outsourcing their work. However, during the pandemic, many of these businesses embraced outsourcing and integrated it as a core component in their business processes.
According to a survey on the status of outsourcing in the United States, it reported that 90% of companies considered outsourcing an essential component in their growth plan. 78% of new and medium-sized businesses believe that outsourcing gives them a competitive advantage in business.
What is Outsourcing
Outsourcing refers to a business practice that involves enlisting outside organizations not affiliated with a company to complete specific tasks. The outside organizations have their own compensation structures with their employees than the outsourcing company.
This enables the outsourcing service providers to complete the work for less money than the organization. Getting your work done at a lower cost is an attractive proposition for many businesses.
Why do businesses Outsource
- To significantly cut down their labor costs, salaries, equipment, and technology costs
- Enable them to concentrate on their core business activities
Types of Outsourcing
Onshoring: Relocating work or services to a lower-cost location in the same country where the company is located
Offshoring: Relocating work or services to third-party providers located out of the country
Nearshoring: Relocating work or services to people in nearby countries, usually those bordering the company’s country.
Advantages of Outsourcing
- Enable businesses to concentrate on their core business work activities.
- Increases efficiency in providing services as the outsourcing company is better equipped to deliver a superior product than your company.
- A cost-saving measure that enables businesses to redirect those funds to other areas of the business
- Provides a competitive advantage, enabling businesses to leverage the outsourcing company’s expertise
- It saves less time as outsourcing companies may specialize in delivering that particular service for businesses.
- Provides a high level of staffing flexibility for businesses with cyclical or seasonal demands, allowing them to access staff within short notice.
- When work is outsourced to outsourcing companies located in a different timezone, work can be done around the clock, resulting in less time to deliver on projects.
- It mitigates the negative work dynamics that arise from employing relatives, family, and friends.
Internal Processes You Should Consider Before Outsourcing Work
Have the relevant gear in place: software, tools, and technology
Your company should have the necessary infrastructure, hardware equipment, cloud-based software to enable your outsourcing partner to access your database remotely.
Create Standard Operating Procedures (SOPs) for your System and Processes
Create an SOP that outlines which tasks your business can outsource and those it can’t.
Here are a couple of items that your SOP should contain:
- Your customer journey (onboarding process to purchase stage)
- How to deliver products and services (purchase to the delivery stage)
- Marketing and communication policies across all channels
You’ll then need to organize this information in a way it makes sense to your outsourcing partner. Here are some pointers of how you could organize your data:
- Create flowcharts and diagrams
- Record screencast videos for processes that your outsourcing partner is expected to perform
- Write a step-by-step guide on how to perform outsourcing tasks.
You must communicate with your team about your decision to outsource specific activities. Here are a few suggestions of how you can make them feel part of the process of bringing a remote team:
- Explain how it benefits them, .i.e. Reduction of manual tasks like data entry.
- Inform them how it benefits the business and your customer .i.e providing better customer service, delivering results faster, being more competitive.
- Reassure them of their job security. Let them know the reason to outsource work isn’t to replace them but to scale your business efficiently.
Factors to Consider when selecting your outsourcing solutions provider
Every outsourcing partner is different. Therefore, you need to find out what they offer and whether they are an ideal match for your company’s outsourcing needs.
Here are some key elements to consider when selecting an outsourcing solutions provider:
Pricing rates and structure
Outsourcing your work offshore offers many cost benefits for your business. Offshore outsourcing providers offer services as single or bundled packages. Therefore, determine what you require most to avoid paying for packages consisting of services that you might not require.
Outsourcing partners use different methods to source talent. Some have an existing database of qualified freelancers or in-house staff. Find out how quickly they can fill roles and what’s could be your level of involvement in the recruitment process.
Your outsourcing partner should have the necessary infrastructure, hardware and software tools to enable them to undertake your project. At the bare minimum, they should have internet access, computers, chairs, and desks. A comfortable and professional work environment for their staff is an ideal requirement.
Human Resource Relations
Your outsourcing partner should provide a supportive workplace environment for their staff. As the world embraces cultural diversity in the workplace, companies are keenly interested in how outsourcing partners treat their minority employees, remuneration, etc.
Industry Certifications & Awards
Industry certifications and awards earned by outsourcing partners prove they are experienced and qualified to provide the services outlined in those certifications. This gives you additional assurance that they can undertake your project and deliver as agreed.
Quality is relative. Therefore, you’ll need to determine that your outsourcing partner will be able to deliver to your expectations. Here are a couple of questions that you need to ask your outsourcing partner to determine if they’ll be able to provide quality work:
- How will my virtual team be managed?
- What infrastructure, hardware, and software do you have in place?
- How will you track productivity and quality of output?
Outsourcing Trends and Future Directions
As the world embraces remote working and outsourcing as a viable alternative to having their work done, the industry is poised to grow in leaps and bounds during and after the pandemic.
Businesses realise that outsourcing provides them competitive advantage by allowing them to access expertise and innovative technologies they don’t have in-house and increases the speed at which they can bring their products or services to market.
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