Businesses of any size can consider outsourcing their business infrastructure to streamline the business, improve the brand image, and boost productivity and growth. Departments that tend to be outsourced include customer services, IT departments, and accounting services, but there are many others. Make sure you know the pros and cons of outsourcing before you commit to it.
Key Takeaways: Outsourcing
- Businesses looking to grow need to reduce their costs first, and outsourcing works well.
- Outsourcing can improve the efficiency of the business and refocus your top talent.
- When third parties handle your internal departments, you have less control over them.
- Cybersecurity is more important than ever before, but outsourcing increases the risks
- It can be challenging to manage outsourced departments in a way that suits a business.
Outsourcing internal departments can streamline your business and improve your bottom line, but there are some downsides that need to be carefully considered. Security is one; management is another. Before making a decision, understand all the pros and cons involved.
Pros
Reduce your costs
One of the first reasons companies think about outsourcing key aspects of the business is to save money and improve the bottom line while increasing efficiency. Core infrastructure that can be successfully outsourced includes customer services, marketing, as well as remote it support.
Outsourcing these core business elements is an excellent way to reduce the operating costs of the business. Firstly, you don’t have to hire teams of employees for your departments, so you save on hiring and training staff. Outsourcing also makes your department more efficient overall.
Improve your efficiency
Business efficiency is a key element for improving your bottom line and growing your business. There are many ways to improve your margins, such as reducing your operating costs, making your department more productive, and offering value to customers. But outsourcing also works.
A fee is normally required for outsourcing services. These fees can be paid annually or monthly depending on your cash flow, but you receive value for money. An outsourcing service not only saves you money in hiring and running departments but they give you access to expert workers.
Refocus your talent
When you don’t need to focus on hiring and training employees for your departments, you can deploy your top talent in the business for better results. Hiring and retaining top talent is the best way to stay competitive and relevant in your industry and to grow the reputation of your brand.
Outsourcing core business infrastructure is effective and profitable, even when you take outsourcing fees into account. Instead of investing heavily in your company and its infrastructure, you access top talent to support your business from the outside – so it’s a win-win.
Cons
Loss of control
One of the main downsides of outsourcing your core business infrastructure is the loss of control you have when organizing your internal departments. While outsourcing companies tend to use the best talent they can find, you still have little influence over productivity and methods.
When you run departments internally, you assign managers to teams and get to know your employees. Over time, you start to understand their personalities and processes, which can contribute to the business. Additionally, you can offer them training to suit business needs.
Security concerns
These days, security is a primary concern for businesses of all types; it’s important to secure company and customer data from cybercriminals, who are becoming more sophisticated all the time. Of course, the more outsourcing departments you have, the higher your security risks.
When partnering with an outsourcing company, it’s important to talk to them about their security protocol and make sure you have appropriate insurance in place should anything go wrong. Security breaches are not only bad for your customers, but they also damage a brand long term.
Management challenges
Having internal teams and departments can be expensive and time-consuming, but the upside is that companies have a lot of control over the training and productivity of their staff; they can also get to know them on a personal level and create a company culture to support productivity.
However, more people means more people management and human resources. If you want to pare down your business and focus your best talent on growth, then outsourcing is an excellent option. Outsource your core business infrastructure and allow a third party to handle training.
Conclusion
When it comes to outsourcing your customer services, IT department, accounting services, and marketing, you need to understand how this model can benefit your business, as well as the risks involved in third-party handling. There are pros and cons to every business decision, and outsourcing is likely to benefit some more than others. Carry out your research before deciding.
