Startups and Outsourcing

In simple words outsourcing is a process through which a company hires another company to do part of its jobs. Outsourcing agencies mainly complement hiring agencies in terms of expertise and time. Currently, it has been quite a common practice among business people especially startups. There are valid reasons for that. Let’s take a look at pros and cons of outsourcing.

Top 7 Benefits of Outsourcing

Complementary feature
Outsourcing is worldwide popular due to its complementary feature. It provides you the expertise, time and other crucial things you lack for business.

Low labor cost
A study shows that outsourcing can help you by saving 60% on overhead costs. If you are on a tight budget you might think to lower cost. That it does.

Access to a different expert pool
Hiring and training people is time-consuming. Instead, accessing a readymade pool of experts is smart.

Helps Focus on core business issues
Outsourcing part of your jobs relieves and helps you focus on core business issues. There are other business issues to work on. Engage your ability for those.

Efficiency on specific job
Outsourcing agencies provide you finest work as they are efficient on the very specific jobs. Cheap labors don’t always mean cheap output.

Different time-zone advantage
Hiring a different time-zone agency benefits you in several ways. The agency can work on behalf of you when your company is closed or your workers are enjoying a festival left.

Relief from stuff problem
During high time being short of stuff is no longer your tension. There is somebody else to look into the matter.

Related: Startups Cannot Live Without Outsourcing

Provide infrastructure support
For an extended number of working people, you needed further infrastructure development. Without developing an extension to your infrastructure you are availing it by hiring an outsourcing agency.

Sharing risk and responsibilities
The idea of sharing the risk and responsibilities make your business things easier. No need to worry anymore if you have handed it over to a panel of experts.

Like everything else outsourcing too has disadvantages. It’s good to know before you take a decision.

A Few Disadvantages of Outsourcing

Confidentiality matters
It is quite worrying if your contract gives outsourcing agency right to see company’s data. Make sure to hire a reputed company in this regard. Keep terms of your contract for unwanted data leakage.

Losing managerial hold
While assigning a specific task to an external company, along with enjoying relief you lose the managerial hold. That is no more your concern unless they fail anyway.

Cheap output
Along with cheap labor comes the tension of cheap output. Outsourcing agencies work at a lower cost. For this, they might sometimes compromise with the quality. Though generalizing is not a good idea.

Hidden cost
The Hidden cost is very common in marketing. Make sure you read contract paper in every detail and don’t unseen any hidden cost. Lengthy work period also causes increased cost facts.

Sharing financial burden
Sharing risk and responsibility is a relief but sharing financial burden is not that good. Especially when you are related to the well-being of another agency.

Time zone again
Time-zone sometimes gives you worries. It is often difficult to synchronize the less similar schedule with different time-zone agency. And thus the work deadline may be disturbed.

Pros and cons of outsourcing, in a nutshell, is up there. However, you need to take a few things into your consideration if you are a startup.

Why Outsource? [VIDEO]

10 things a startup should know while making a decision about outsourcing

Make clever choice of tasks for outsourcing
Find tasks of your company that an agency can do better. Survey the market and be sure of your choice. It is the most important thing for a business startup to focus on while outsourcing.

Be specific about the tasks
Be specific to describe your task. It lessens many unwanted hassles. Ask the agency to write tasks precisely in their contract too.

Careful while selecting an agency
The reputation of any agency matters in the market. So it is wise to be careful with the selection of outsourcing agency. Do a detailed survey if possible and make a smart choice.

Related: 7 Things Startups Should Know About Outsourcing Development

Mindful reading of contract paper
Mindful reading of contract paper would save you in many ways. You will get to know your partner well. Make sure the written document does not have nonconformity with the given contract.

Penalty for unwanted data leakage
Since confidential data is the heart of a business it’s better to include a penalty for unwanted data leakage. This will the agency make the agency concern over leakage issue.

Don’t compromise on efficiency issue
Finding cheap labor is okay for reducing cost but don’t compromise on efficiency issue. Because efficient agency would earn you several times returns.

Find a complementary support
Specify lacking in your company. Therefore find an agency that can provide you complementary support against you lacking.

Ensure enhanced return
Once you find an efficient agency it becomes quite easier for you. An efficient agency assures enhance returns.

Avoid lengthy period of working
A lengthy period of working may not turn effective always. Choose a partner and provide a task for a little period. You may take the partner with you for a long-term if found support effective.

Before any decision survey market
The survey is best for making a decision. Choosing blindly may have you hit unexpectedly.

RelatedWhen Outsourcing Works Best for Startups

In our current reality where you’re required to be imaginative, profitable and determined so as to slice through the clamor, deliberate outsourcing as your main key. In the event that you’ve attempted it in the past, however, didn’t get the outcomes that you needed, don’t lay down of arms.

                                                                                                                                 Author: Sonia Omar