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Startups and Outsourcing: Ways to Accomplish Progress and Innovation

Startups and Outsourcing: Ways to Accomplish Progress and Innovation

In simple words outsourcing is a process through which a company hires another company to do part of its jobs. Outsourcing agencies mainly complement recruiting 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 the pros and cons of outsourcing.

Top 9 Reasons Why Outsourcing is Good

  1. Complementary feature
    Outsourcing is worldwide famous due to its additional feature. It provides you the expertise, time and other crucial things you lack for business.
  2. Low labor cost
    A study shows that outsourcing can help you by saving 60% on overhead expenses. If you are on a tight budget, you might think to lower price. That it does.
  3. Access to a different expert pool
    Hiring and training people is time-consuming. Instead, accessing a readymade pool of experts is smart.
  4. Helps Focus on core business issues
    Outsourcing part of your jobs relieves and enables you to focus on core business issues. There are other business issues to work on. Engage your ability for those.
  5. Efficiency on specific job
    Outsourcing agencies provide you the most exceptional work as they are efficient in particular tasks. Cheap labors don’t always mean consistent output.
  6. Different time-zone advantage
    Hiring various 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.
  7. Relief from stuff problem
    During the high time being short of stuff is no longer your tension. There is somebody else to look into the matter.
  8. 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.
  9. 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.

Related: Startups Cannot Live Without Outsourcing

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

A Few Disadvantages of Outsourcing

  1. Confidentiality matters
    It is quite worrying if your contract gives outsourcing agency right to see the company’s data. Make sure to hire a reputed company in this regard. Keep terms of your agreement for unwanted data leakage.
  2. Losing managerial hold
    While assigning a specific task to an outside company, along with enjoying relief, you lose the administrative grip. That is no more your concern unless they fail anyway.
  3. Cheap output
    Along with cheap labor comes the tension from cheap production. Outsourcing agencies work at a lower cost. For this, they might sometimes compromise with quality. Though generalizing is not a good idea.
  4. Hidden cost
    The Hidden cost is widespread in marketing. Make sure you read contract paper in every detail and don’t unseen any hidden cost. Extended work period also causes increased cost facts.
  5. Sharing financial burden
    Sharing risk and responsibility is a relief but sharing the financial burden is not that good. Primarily when you are related to the well-being of another agency.
  6. 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]

Related: 7 Things Startups Should Know About Outsourcing Development

10 thing a startup should know while deciding on outsourcing

  1. Make a smart choice of tasks for outsourcing
    Find the functions 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.
  2. Be specific about the tasks
    Be particular to describe your responsibility. It lessens many unwanted hassles. Ask the agency to write assignments precisely in their contract too.
  3. Careful while selecting an agency
    The reputation of any agency matters in the market. So it is wise to be cautious with the selection of outsourcing agency. Do a detailed survey if possible and make a smart choice.
  4. Mindful reading of contract paper
    Exact text of the 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.
  5. Penalty for unwanted data leakage
    Since confidential data is the heart of a business, it’s better to include a sentence for unwanted data leakage. This will the agency make the agency concern over leakage issue.
  6. 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.
  7. Find complementary support
    Specify lacking in your company. Therefore find an agency that can provide you mutual support against you lacking.
  8. Ensure enhanced return
    Once you find an efficient agency, it becomes quite more comfortable for you. A competent agency assures they enhance returns.
  9. Avoid lengthy period of working
    A prolonged period of working may not turn effective always. Choose a partner and provide a task for a limited period. You may take the partner with you for a long-term if found support useful.
  10. 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 to slice through the clamor, deliberate outsourcing as your primary key. If you’ve attempted it in the past, however, didn’t get the outcomes that you needed, don’t lay down of arms.

  • Updated May 14, 2019
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