What Are the Advantages and Disadvantages of Outsourcing in Business?

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Business

Outsourcing might not be something you have really considered before, and many people discount it entirely. After all, this is your business, and you are responsible for everything that happens within it, whether you are the only worker or there are dozens of people relying on you. 

This is true; you are responsible for everything that goes on within your business. Yet that doesn’t mean you can’t allow other people to do some of the work for you. As long as you are overseeing what is happening, outsourcing some tasks – primarily if you work alone – can be exactly what your business needs. Of course, this isn’t always the case, and there are disadvantages just as there are advantages to the idea of outsourcing, and what is right for one business may not be right for the next. 

This is why it is essential to research the idea of outsourcing as much as possible before you decide whether it’s a yes or a no regarding your own business. Here are some of the main pros and cons to give you a start in determining whether you should outsource some or all of your work. 

Advantage: Better Focus 

When you have a lot of different tasks to complete in a variety of different areas within your business, you are going to be unfocused. You won’t know where to start, and you won’t know what to prioritize, as everything seems just as important as everything else. This can mean that although you might feel as though you are getting things done, in reality, you are just moving tasks from one column to another on your to-do list, and really getting nowhere. 

It also means that you will be unable to focus on the core of your business. If you have to deal with the accounts and the marketing and the payroll and everything else, you won’t be doing whatever it is that is bringing in the money in the first place. Your standards could slip, and you may even start to lose customers. At the very least, you will be limiting yourself to the amount you can do (and therefore the money coming in) because you aren’t able to work fully in the area that needs you the most. 

Advantage: Better Productivity 

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If you choose to outsource to an expert engineering firm, to marketing professionals, to an accountant who really understands your industry or any number of other third parties who can help you, you will boost your productivity substantially. You will no longer be taken away from the tasks you are good at, and that brings you money to do the jobs that you don’t have the skills for and don’t enjoy. 

Although these tasks might be important, they are better done by other people. You need to find people who are good at the things you are not so good at; not only will they get the job done much more quickly than you could, but they will also get it done to a higher standard. 

This can sometimes be a challenging idea to take on board; it means acknowledging your own weaknesses and understanding that there really are some things we just aren’t great at. However, once that has been understood, and outsourcing is in place, you will find that your business runs much more smoothly, and everything is much more efficient and productive. 

Advantage: Cost Saving 

It may sound strange to suggest that outsourcing can be a way to save money in your business because you do, of course, have to pay the third party for their work. If you did it yourself, you wouldn’t be spending the money, so how can outsourcing be a cost-saving exercise? 

You need to look at the long-term picture rather than the immediate one. Although you will be spending money, the more efficient, more productive business that this produces will mean you can make more sales and be present within the company to make the right decision to move it forward. This will all bring in more money, which ideally will offset the money you are spending on outsourcing. 

Disadvantage: Loss of Control

The biggest issue that business owners have with outsourcing their tasks to third parties is that they fear they will lose control. They may be in charge of the overall project, but they won’t be able to micromanage the work itself. This doesn’t have to be a bad thing; as mentioned above, it will undoubtedly give you more time for other things. However, it can feel like too much of an issue for some business owners who want to ensure that everything their business does, down to the smallest detail, is in keeping with their ethos and brand

This can be a hard issue to get over, and it is a reason why some people prefer to do everything themselves. 

Disadvantage: Security Issues 

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Depending on what tasks you are outsourcing and what kind of business you run, there might be security issues with certain types of data. If you are working with sensitive information, it could be challenging to give any kind of access to a third party – this might even be included in your contracts with clients. Still, even if it isn’t, it is certainly something you should think about. 

If you are unable to outsource due to the sensitive nature of your work, your next best option is to hire someone to help you if you are finding that you have too much to do. This will be more expensive than using a third party, but if it means you can get the work done to a high standard, in budget and on time, then it will be at least worth considering. 

Disadvantage: Service Delivery 

When you are outsourcing, you might find that the work returned to you is just not of a high enough standard, which means you either have to spend time getting it done correctly by the company you used, or spend money in finding someone else to do it. You might even decide it was best to do the work yourself and then have to postpone other projects because of the fixes you have to make. 

One way to prevent this problem from happening is to thoroughly research the company before you use them. Ensure you read reviews and see examples of their work so that you are happy with what you are paying for.

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