DigiWorks

What Is Outsourcing?

Feb 6, 2023 • 15 min read

The outsourcing industry grew rapidly over the past decade. By 2016, it had surpassed $1 trillion in value. This growth has been fueled by companies looking to outsource work to lower labor costs, improve quality, and speed up delivery times. As a result there is now an increased demand for highly skilled workers.

Companies are increasingly hiring people who are skilled in areas such as software development, engineering, product management, customer support, marketing, and finance. These roles require specific knowledge and experience. They are often hard to find because most people don’t know what they do.

You’ll learn:

  • What Is an Example of Outsourcing?
  • What Are the Disadvantages of Outsourcing?
  • The Advantages of Outsourcing
  • Focus on Core Activities
  • Maintain Lower Costs
  • Promote Growth
  • Offer Staffing Flexibility

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What Is an Example of Outsourcing?

Outsourcing is when one business hands over some responsibilities to another. It is a business strategy intended to save on operating costs and maintain service levels. There are many different types of outsourcing, including:

• Contracting out work to someone else.

• Hiring people outside your organization to help you complete projects.

• Offering products or services to customers that aren’t yours.

• Using experts to provide advice on how to improve operations.

• Domestic outsourcing

The main reason why most organizations outsource is because of cost savings. By delegating tasks to others, companies can free up resources to spend on other areas of their business. For example, if you’re running a small retail store, hiring someone to answer phones might make sense. If you’re a large corporation, however, you probably don’t want to hire someone just to answer phones. Instead, you’d likely use call center outsourcing for those business functions.

What Are the Disadvantages of Outsourcing?

Outsourcing allows companies to outsource their IT needs to a third party. This could mean hiring someone abroad to do the job you used to do yourself. For example, outsourcing might include having a vendor provide technical support for your computer system. Or it could involve sending your data to a server located somewhere else. There are many advantages to outsourcing. But there are disadvantages too. Here are some things to consider before making a decision about outsourcing.

  • That you would be bound to an outsourcing contract
  • You would have to adapt your business model
  • You need to find a reputable outsourcing facility
  • Some American companies are against outsourcing practices

Common Types of Outsourced Work

Content writing is the most common type of outsourcing work. It’s used to write blogs, articles, press releases, emails, social media posts, web copy, white papers, brochures, eBooks, books, infographics, presentations, etc.

Customer support service is another popular type of outsourcing work. This involves providing customer service, technical support and help desk, etc. Supply chain management involves managing inventories and logistics. Other skill jobs you can outsource include:

Accounting

Accounting is an important part of operating a successful business model. Without it, you wouldn’t know how much revenue you’re generating each month, what expenses are coming out of your budget, or whether you’ve met your goals for the quarter. Accounting software helps businesses keep track of financial information, while professional accountants provide advice on taxes and compliance issues. If you don’t have access to an accountant, outsourcing your bookkeeping could make sense.

Outsourcing accounting services can save your business money, especially if you’re just starting up. You’ll no longer have to pay salaries for employees whose sole job is to handle bookkeeping tasks. Instead, you can hire professionals to do the work for you. Professional accountants are experts in the field, and they’ll likely charge less than salaried employees. Plus, they’ll be able to offer additional services like payroll management and tax preparation.

Hire a professional accountant today to help you manage your finances.

Sales

Outsourcing sales is an effective strategy to grow your business without having to hire additional employees. In fact, it can save money while expanding your customer base. But there are some things to keep in mind before you start outsourcing. You must first determine whether you want to outsource sales or just handle the administrative side of the process. If you choose to outsource the entire process, here are three tips to help you succeed.

1. Determine Your Goals

Before you begin outsourcing, make sure you know what you’re looking for. Are you trying to increase revenue? Save money? Increase efficiency? Do you want to focus on one particular aspect of your business? Once you’ve determined your goals, you’ll need to decide where you want to outsource. For example, do you want to outsource lead generation? Or do you want to outsell your competitors?

2. Choose the Right Partner

Once you’ve figured out your goals, you’ll want to find someone who can help you achieve those goals. There are many ways to go about finding the right partner. One option is to use an online marketplace like Upwork or Fiverr. These sites allow freelancers to bid on projects and clients to post jobs. Another option is to look for companies that specialize in outsourced solutions. They often offer packages that include everything from marketing to fulfillment.

3. Consider How Much Control You Want to Give Away

When deciding whether to outsource sales, you must weigh the pros and cons of giving up control. Some people prefer to maintain complete control over every detail of their business. Others enjoy delegating tasks because it allows them to spend more time on activities that bring greater value to their businesses. Before choosing to outsource, ask yourself how much autonomy you want to give away.

Marketing

The marketing industry is one of the most competitive industries out there. There are thousands of companies competing for attention and dollars. So how do you stand out among the crowd? Here are some tips to help you reach your goals.

1. Be clear about what you want to achieve. You don’t have to be vague. Make sure you know exactly what it is you’re trying to accomplish. If you aren’t clear on what you’re doing, you’ll never be able to measure whether or not you’ve achieved success.

2. Start small. Don’t try to grow too fast. Focus on one thing at a time. If you spread yourself thin, you won’t be able to focus on anything.

3. Know your audience. Who is your target customer? What problems does he/she face? How can you solve those problems? Once you understand your customers’ needs, you can start creating solutions that meet those needs.

4. Create something unique. People love uniqueness. They appreciate things that are different. Your product doesn’t have to be expensive either. Think outside the box. Look for ways to make your products or services cheaper while still providing quality.

5. Use data. Data helps you see where you’re succeeding and where you’re failing. You can use analytics tools to identify trends within your traffic and conversions. This allows you to fine tune your efforts and optimize your campaigns.

6. Measure everything. In today’s world, nothing happens without measurement. If you’re not measuring your progress, you won’t know whether or not you’re making progress.

Administrative Tasks

Virtual assistants are becoming increasingly popular among small businesses because they can do everything from bookkeeping to customer support without having to hire full-time workers. But what exactly does it take to become a successful virtual assistant? Here are some tips to make sure you find the best one for your needs.

1. Skillset

The most important thing to look for in a VA is whether she has skills that match your specific requirements. For example, if you want someone who can handle social media marketing, you’ll probably want to go with a VA who specializes in social media management. If you just need general administrative assistance, you might consider looking into VAs who specialize in office administration.

2. Experience

If you’re thinking about hiring a virtual assistant, you’ll want to make sure that you choose someone who has experience working in your industry. You don’t necessarily need to hire someone with experience specifically within your business, but you should definitely avoid hiring someone who doesn’t understand how your particular type of work operates. This could lead to frustration down the road.

3. Personality

You’ll want to find someone whose personality meshes well with yours and your team’s. While there’s nothing wrong with being outgoing and friendly, you’ll want to find someone who fits in with your team and helps keep things lighthearted.

Customer Service

Outsourcing customer service is a great way to cut costs without sacrificing customer satisfaction. But there are some things you need to keep in mind before you start down this path. First, make sure you know what information to collect before outsourcing your strategy. Second, don’t forget about the people handling the incoming calls. They’re just as important as the ones answering the phones. And finally, consider whether you want to outsource customer service to a third party or someone inside your organization.

Your customer service levels could get a huge boost from an outsourcing contract!

The Advantages of Outsourcing

Outsourcing is one of those terms that people love to hate even though it has proven to be an effective business strategy. But it doesn’t have to be a dirty word. In fact, outsourcing can actually make sense for many businesses. Here are some advantages of outsourcing:

1. Save Money

When you’re starting up a business, every dollar counts. By contracting out work that isn’t core to your operation, you’ll be able to cut costs and focus on growing your business. You might even find that you don’t need to pay someone full-time because you can do the job yourself. It is extremely cost effective as making use of staff from Asian countries, Central and South America and Africa are a lot cheaper than paying US minimum wage rates. You also save on paying transportation costs, and energy costs and have wider access to the availability of skills. The demand for cost efficiency has never been higher and outsourcing is a good way to meet these goals!

2. Focus On What Matters Most

If you’re spending too much time managing employees or doing things that aren’t really important to your business, you could be missing opportunities to grow. When you outsource, you can focus on the aspects of your business that matter most. Having people take care of your admin, daily business operations and marketing frees up your time to focus on your best business practices.

3. Get Expert Help

You know your business better than anyone else. So why wouldn’t you want to tap into that expertise? If you’ve got questions about how to improve your marketing strategy, you can ask a professional for advice. They’ll bring experience and knowledge to the table that no employee ever could.

Focus on Core Activities

Outsourcing non-core tasks allows companies to focus on the most important parts of their operations while delegating less essential work to external providers. This is a business strategy that frees up internal resources to do more high-value projects. At the same time, outsourcing allows companies to save money and improve efficiency. But it doesn’t always make sense to outsource everything. A recent study found that nearly half of employees surveyed felt pressured to take on additional responsibilities outside of their job description. And many of those responsibilities weren’t adding value. In fact, the study found that about one-third of respondents didn’t feel like their jobs added enough value to justify being paid for them.

The good news is there are ways to ensure that every task adds value to your organization. Here are five tips to help you decide whether a certain activity is worth outsourcing:

1. Ask yourself why you want to outsource the task. If you think you need to cut costs, consider how much money you’re spending on the project. Is there another way to accomplish the goal without hiring someone else? Are you able to find a cheaper option? Do you know anyone who could perform the task better than you?

2. Evaluate the skills required. When deciding whether to outsource something, ask yourself whether the skill set needed to complete the task is within your department. If it isn’t, consider whether the person performing the task needs training. Can you train them? Will it cost too much to hire someone new?

3. Look for opportunities to automate the process. You might be surprised to learn that some processes aren’t actually very complicated. For example, you probably don’t need to hire someone to write a press release because the technology that exists today allows you to post the information directly to social media sites. Or maybe you don’t need a graphic designer to produce logos. There are plenty of tools online that can generate professional-looking images for free.

4. Think about the future. How long does the task require? What happens if you stop paying the provider? Does the provider have access to proprietary data? These questions can help determine whether the task is worth keeping internally or outsourcing.

5. Consider the benefits. Sometimes, even though a task seems simple, it still requires specialized knowledge or expertise. If you’re trying to build a relationship with a potential client, for example, you might need to spend a few hours meeting with them rather than sending a generic email.

Maintain Lower Costs

Outsourcing is a great way to cut down on overhead costs without sacrificing quality. The cost savings are enormous. In fact, it can actually help improve your bottom line. By outsourcing certain tasks to third parties, you can eliminate some of the administrative duties that come with running a business. This frees up resources for you to focus on what really matters -growing your business.

Working with contractors can result in reduced costs and overhead expenses. When you outsource work to someone else, you no longer need to pay employees to perform those same functions. You can also avoid paying benefits such as health insurance, retirement plans, vacation days, etc. since you’re hiring outside companies to handle these things.

Hiring managers and HR professionals are expensive. Instead of having to hire full time human resource personnel, consider outsourcing your recruiting needs to a staffing agency. They’ll take care of everything from screening candidates to onboarding new hires. Plus, many agencies charge lower fees compared to traditional recruiters.

Promote Growth

Outsourcing is one way to expand your business without having to do it yourself. But there are several things to consider before you make the leap. Here are three tips to keep in mind.

1. Choose Wisely

There are many different types of outsourcing companies. Some focus on specific industries, while others offer a range of services. Before choosing one, research what type of work they specialize in. If you want to hire someone to write articles for your blog, look for a company that specializes in writing. Also consider whether international or domestic outsourcing is for you.

2. Consider Your Needs First

Before you start looking for vendors, think about what you need. Do you just need some extra hands to take care of administrative tasks? Do you need overall reduced costs? Or do you need someone to handle marketing and sales? You might find that you don’t need both.

3. Look For A Company With Experience

When you’re outsourcing, you’ll want to partner with someone who knows how to run a successful operation. Ask prospective partners about their experience and ask for references. Also, check online reviews for previous clients to see if they had positive experiences before engaging in an outsourcing contract.

If you’re looking for a more affordable and sustainable option you might consider making use of a hiring platform like DigiWorks. Virtual assistant companies or platforms like DigiWorks are amazing as they not only match you with pre vetted and assessed admin assistants that can take care of all your business needs but they will also handle all onboarding and payroll needs as well. Since DigiWorks’ talent are from emerging countries, the rates are much lower than the US minimum wage and you don’t have to deal with the risk of dealing with scammers or incompetent freelancers.

Offer Staffing Flexibility

The outsourcing industry allows companies to maintain flexibility throughout the year, saving both money and resources. Offering flexible staffing options can benefit employers because it gives workers more choice about how many hours they want to work each week. This way, employees are able to set up their schedules around their personal lives rather than having to fit into a rigid schedule.

Companies should work closely with their outsourcing partners to ensure quality control. When working with an external provider, it’s important to communicate clearly what you require from them. If there are issues regarding quality, communication, or performance, it’s best to address those concerns immediately.

Ready to build your remote team?

Use the DigiWorks platform to hire, manage, and pay remote talent from all over the world.

Conclusion

When outsourcing, it’s important to know what you’re giving up. There are pros and cons. Before outsourcing, make sure you understand the pros and cons of the process. If you’re not sure where to start, a platform like DigiWorks could be an amazing option for you as there is a trial period and you do not have to commit to a strict contract!

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About DigiWorks

DigiWorks is an easy-to-use platform that helps small businesses and start ups hire amazing remote talent from around the world. DigiWorks offers a way for you to hire, manage and pay people from all countries. If you find an amazing virtual assistant from Philippines, a content writer from Nigeria, or operations manager from South Africa manage and pay your entire team from one platform with no hassle.