Should You Consider Outsourcing For Your Business?

Outsourcing is a practice that, for certain kinds of business, is immensely powerful. In some cases, it allows for entirely new business models that wouldn’t otherwise be practicable.

If you’re considering outsourcing in your business, then it’s worth taking stock of the upsides and downsides. Let’s consider these.

What is outsourcing, and how does it work?

You need a task performed. But, rather than instructing your workers to perform that task, you approach an organisation or individual external to your business. This is outsourcing.

Suppose that the computer system on your premises breaks down: you might bring in a person with the relevant expertise in computers to fix the problem – but this person needn’t be an employee.

Certain kinds of business are synonymous with outsourcing. However, the number of tasks that can be outsourced is potentially infinite.

Advantages of outsourcing

So, why might we do this?

For one thing, it would be incredibly cumbersome to maintain a workforce capable of doing every single job that your company might need done. This applies especially in the case of highly specialised, rarely-performed tasks. The gas engineer who spends an hour on your premises servicing the boiler doesn’t have to enter into a long-term contract with your business in order to do the job.

By outsourcing, you can keep your wage bill under control. Labour is only brought in as and when it’s required. You’ll be able to keep your salaried staff focussed on their core work, and undistracted by specialist tasks to which they’re unsuited. Outsourcing will also allow you to bring in expertise which might otherwise be affordable. You might consider a consultancy firm that provides guidance to decision makers, and advice on obscure financial, regulatory and legal matters.

Disadvantages of outsourcing

So, with all of this said, why isn’t outsourcing more prevalent? Why aren’t all businesses simply small collections of highly specialised experts?

Outsourcing means surrendering a small amount of control over the way that your business is run. If you’re outsourcing, and the work is not being performed in a timely manner, then you’ll have limited scope to investigate why.

There’s also the risk that the company you’re outsourcing to could run into difficulty, or even go out of business. Unless you have a clear insight into the company’s internal financial affairs, this is a risk that can’t be discounted.

In some cases, a culture of outsourcing could be detrimental to employee morale. Your staff might feel that they’re going to be made redundant imminently because there’s an outsourced alternative available.

Finally, we should consider the importance of data security. The more external organisations you work with, the more opportunities there are for sensitive information to be leaked. To combat this, you’ll need vigorous procedures – which can often be expensive to implement.