Benefits vs Drawbacks of Outsourcing

Outsourcing is something you’ve probably been hearing quite often in business. Some hate it, a lot of business owners shy away from it, while countless people depend on it. No matter which side you’re on, it’s important to know that outsourcing is here to stay for the long term.

As an entrepreneur in a super-competitive market, I myself have used outsourcing to accomplish various tasks. Whether it’s content writing, data entry, web design, or research, there’s a market of specialized workforce waiting to lend you a hand.

But before you start outsourcing, you should first consider the benefits vs drawbacks. It may present a variety of advantages to your business, but it could also pose challenges if not outsourced to the right people. With that said, outsourcing is not one that any business owner should take lightly.

Here’s what you need to know before deciding to outsource your next project or campaign.

What is Outsourcing?

Outsourcing is quite simply an allocation of business-specific tasks or processes to an external agency or service provider. This is in lieu of improving the quality of service, driving innovation, or benefiting from lower labor costs.

A lot of companies and entrepreneurs outsource at times when they cannot handle all aspects of the business process internally. They also outsource for processes that are temporary or when they do not intend to hire in-house professionals to perform tasks. Once a task is outsourced to a service provider, he/she will take responsibility of performing the task and maintaining a company or business’ assets.

If a certain task or process is outsourced to service providers located in a different country or to foreign subsidiaries, outsourcing takes the form of offshoring, or in this case, offshore outsourcing.

Benefits of Outsourcing

Here’s why you should outsource:

  • You can eliminate the bottleneck and unleash new growth in your business
  • Less risky than taking on full-time employees
  • Using freelancers simplifies your accounting
  • Access to higher quality talent at a lower cost
  • You can make more responsible staffing decisions due to lack of emotional involvement

Drawbacks of Outsourcing

Like everything else, outsourcing also presents some possible drawbacks. For instance, if you’re managing a large, complex project like a mobile game, trying to build a team of freelancers may not be the best option there is.

I made this mistake in 2014 and it cost me over $100,000. Seriously, you don’t want this happening to you.

You see, projects like these require a certain amount of creativity, quick pace, agility, and team work in order to achieve desired results. You will most likely get the best results in the shortest time possible if you hire an agency or service providers who develop similar projects every day.

Other problems you might encounter when outsourcing include:

  • Possible loss of control of certain tasks/business processes
  • Poor quality/performance
  • Problems with turnaround time
  • Slow response times
  • Lower than expected realization of results and benefits

 

With all the benefits and drawbacks of outsourcing in mind, it’s best that you carefully consider them before approaching an agency or service provider. Determine the importance of the tasks that are to be outsourced.

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