Outsourcing 101: What, When & How To Do It Successfully

Outsourcing 101: What, When & How To Do It Successfully

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This article has been contributed by Joyce Chou.

Are you busier than ever and wanting to scale your business? Or are you just not getting enough done? It may be time to outsource some of your work. But it’s important to know why, when and how to outsource successfully before you take the next step.

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The business world is becoming more interconnected every day. Because products and services are more complex than ever, it only makes sense for companies to outsource some tasks.

Take Apple, for example. The brand is famous for keeping its software and the App Store firmly under control. When it comes to physical devices, however, Apple completely outsources the actual manufacturing process.

Apple's outsourcing of manufacturing

Image source: Apple

Most companies outsource at least some work, whether it’s data entry, content creation, web development, or something else. This gives their teams the chance to focus on the work at which they excel, rather than attempting to complete projects in which they have no expertise. This is a smart decision, but to many, the benefits of outsourcing are not always clear.

To begin, it’s worth rewinding and asking: What is outsourcing, and what makes it effective?

Outsourcing: An Overview

Because of companies like Apple, many people think about outsourcing in connection to moving entire departments, particularly manufacturing, overseas. However, the practice is much broader than that.

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You can outsource tasks as small as a few hours of data entry or as large as managing your entire marketing campaign — and there are no geographic rules for doing so. You could outsource a project to someone within your own city or on the other side of the world.

At its core, outsourcing is nothing more than the practice of paying a freelancer or an outside agency to complete work for your company. It’s a flexible tool that has many benefits for companies both big and small.

The 3 Biggest Benefits of Outsourcing

Whether you run a young startup or a more established company, your business has a specific focus. Most of your employees are likely skilled in areas directly related to your business. This is excellent for meeting your customers’ needs, but it means that you may not have the necessary talent in-house to complete more peripheral tasks. That’s where outsourcing comes in.

1. Get Expertise You and Your Team Don’t Have

Most companies today need web development, social media, content and design work at some point. Giving these responsibilities to employees who excel at other work can lead to mediocre results. By outsourcing, you can keep your current employees dedicated to their work and keep your business running smoothly.

2. Access a Wider Talent Pool

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Outsourcing a job gives you access to a much wider talent pool than you’d otherwise have. Once you look beyond your local community for a task, you’ll find experts with a wide variety of skills and talents.

You can connect with these people for a single project, or you can build a long-lasting business relationship. Either way, you have more options when you’re not limited to hiring someone full- or even part-time.

3. It Saves Both Time and Money

Finally, outsourcing your work to an expert is cost-effective in terms of both time and money.

When you outsource a job to an expert, the results will more likely be high-quality and completed quickly. Furthermore, you typically only pay for the time the expert spends on your work, as opposed to hiring a new full-time employee that requires onboarding.

For instance, outsourcing to a professional writer can mean getting better content than if you had someone internally — who’s not much of a writer — do it. You won’t have to do as much editing, saving you time and leading to fewer hours spent on content creation.

Why Should You Outsource?

Companies face varying circumstances, and outsourcing isn’t quite a one-size-fits-all solution. Depending on the work you need and your given resources, it may not always be the best option. However, outsourcing is a practical and cost-effective strategy if you face one of the scenarios below.

When You Need a Variety of Tasks Completed

Running a small business involves juggling dozens of small tasks. From answering phones and emails to maintaining an active social media presence, it’s easy to get lost in the weeds of day-to-day minutiae and lose track of the big picture.

Long to-do list

If many small tasks take up your precious time and resources, outsourcing may be the right solution for your business.

Many business owners find that outsourcing to virtual assistants helps them focus on their core competencies. Instead of being distracted several times a day by low-priority but time-consuming projects, outsourcing redistributes work so that you can stay focused.

That said, it’s not just simple tasks that can be outsourced. You can also outsource more complex work to experts rather than trying to manage everything yourself.

When Managing Time Constraints

Deadlines are a fact of life. Managing your company’s time wisely is an integral part of maintaining your reputation and retaining clients. If you have a tight deadline coming up, outsourcing some work can save you a significant amount of time and help you meet your goals.

For example, maintaining your website — it can be a deceptively labor-intensive task.

And during busy seasons, it’s all too easy for your website to fall to the wayside. Of course, as one of your most important marketing tools, it deserves regular attention and updating. By outsourcing website maintenance, you can keep your website up-to-date without spending your own time on it.

That’s just one example, though — you can outsource countless other essential projects related to your company. For tedious and repetitive jobs like data entry, it especially makes sense for someone else to take the reins so that you can focus on larger business priorities.

When You Lack Personnel

One of the biggest bottlenecks in young companies is a simple lack of personnel. You may have your entire strategy planned out to a T, but you don’t have enough employees to execute it. That’s when outsourcing is most effective.

By outsourcing, you can find the specific skill sets needed without committing to a permanent, long-term hire. This gives you the flexibility to execute even the most in-depth business strategy with just your current staff.

On top of that flexibility, outsourcing can also act as a test or trial period to help you decide whether bringing a particular set of tasks in-house makes sense. Do you need to hire a new employee, or is it feasible for someone external to continue managing a certain project?

Outsourcing can help you answer that — and it’s also an excellent way to see whether expanding your business in a specific direction is worthwhile.

When Your Company is Growing Quickly

If your company is rapidly expanding, then you may not be able to hire and train people fast enough to keep up. Outsourcing parts of any large task lets you skip the formalities that come with training and onboarding a full-time employee. Instead, you can break down a major project into smaller segments and outsource each piece to qualified freelancers.

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If your company is growing dramatically, you can even outsource your entire human resources, IT management, accounting, or other important departments. This can take significant responsibility off your hands, giving you time to focus on your strengths instead. More importantly, it can help ensure that your company is complying with legal or technological obligations.

When You Need Outside Expertise

Finally, outsourcing is a great option when you need outside expertise for a one-time project or on an ad hoc basis.

For example:

  • You don’t need your taxes done every day, so outsourcing your taxes makes sense.
  • Need a logo for your company? Unless you’re rebranding, you won’t need this to happen more than once.
  • Designing a new workspace is a bigger project, but it still makes sense to outsource as a short-term task.

Simply put, for any task that is uncommon but specialized, it makes sense to outsource. There’s no reason to hire a new in-house employee for something that happens once a month or less. Instead, reach out to an expert. You’ll get to take advantage of their knowledge while also saving money.

6 Best Practices for Outsourcing

Outsourcing work means putting trust and resources into someone outside your business. While this can naturally cause concern, you should know that success is not solely dependent on your outsourcing partner. It also hinges on you and your ability to set clear expectations for them.

To that end, you must invest time and effort from the outset to guarantee that the outsourcing process is worthwhile. Follow these six best practices to get more from outsourcing.

Goals typed oneto paper using typrewriter

Before you even begin looking for an outsourcing provider, you need to define your goals. The provider you choose for a one-off instance of data entry will look much different from the provider of a full suite of accounting services.

Defining your goals for the outsourcing relationship provides the groundwork for your search. Your goals should include:

  • The specific tasks you need to be completed
  • Your budget for the work, whether it’s hourly or a flat rate
  • Deadlines for returned work
  • Your desired outcome from the work

Once your goals are clearly defined, you can begin your search with confidence.

2. Don’t Base Your Decision Solely On Price

The phrase “you get what you pay for” is more than just a platitude. When it comes to outsourcing specific tasks, it’s the truth. While it may be tempting to choose an outsourcing provider based on their low price point, make sure to do your research.

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A freelancer may have low rates because they’re trying to build their portfolio. On the other hand, it may be because their work is less than stellar. Do your research if a price seems too good to be true.

Remember, when you’re making decisions for your business, it’s worth investing in quality. Hiring a “budget” outsource provider may produce results that you need to rework completely. You can budget more effectively by hiring a quality outsourcing provider from the start.

3. Choose A Trustworthy Provider

Even if their quoted price seems reasonable, it’s still worth doing your research on a provider. Ask for a portfolio of previous work. Look for reviews given by previous clients. Just because the provider has a website doesn’t mean that they are trustworthy.

Doing your research and verifying that they have a history of successful work can help you ensure that you’re not wasting your time or potentially falling victim to a scammer.

4. Provide Complete Details And Requirements To Your Provider

You have specific needs and goals when it comes to the work you’re outsourcing. Give these details to your outsourcing provider. The more detailed and complete you can be, the better the results will be. After all, your provider can’t read your mind — give them all the information they need from the start.

If any necessary information is protected by NDAs, HIPAA or other privacy laws, provide it in a safe form. You may need to have the provider sign an NDA or similar form in this case. It’s still worth it to ensure quality results in the end.

5. Create A Contract

Outsourcer signing an NDA form

Verbal agreements are reasonable for informal agreements between friends and family, but they aren’t the right choice for an outsourcing agreement. Do your due diligence by setting up a clear contract to guide your business relationship; this will protect both parties from legal problems.

Contracts outline important aspects of outsourced work, including but not limited to:

  • Ownership of assets
  • Ownership of intellectual property
  • Deliverables: content, products, websites, etc
  • Confidentiality clauses
  • Agreed-upon rates of pay
  • Deadlines and due dates
  • Ways to terminate the contract

Getting these details in writing helps everyone involved clearly understand the terms of the business relationship. It’ll also mean less room for doubt or disagreements.

6. Keep Lines Of Communication Open

Finally, communication is the key to successful outsourcing.

Watch out for challenges like time zone differences and language barriers. That doesn’t mean you should only look to providers in your region or that only share your language — just that you should be proactive in addressing and mitigating any issues.

For instance, if your outsourcing provider has questions or needs clarification, you should be prepared to respond quickly.

Communication can also help refine concepts and products, leading to a better final result. Not to mention, efficient communication shortens the timeline for task completion. The more frequently and effectively you communicate with your outsourcing provider, the better their work tends to be.

Outsourcing Leads to Opportunities

Outsourcing is more than the news makes it out to be. It’s a useful tool that allows businesses of all sizes to maximize their resources.

In short, outsourcing work can help your company expand more quickly, meet deadlines and take advantage of expert advice. Most importantly, it can help you focus on your business’s core competencies instead of spending time trying to reinvent the wheel.

It’s easy to outsource effectively, too. Setting clear goals and choosing a trustworthy outsourcing provider are the most complicated parts of the process. Once you know what you want out of the process and develop a relationship with an outsourcing provider, you can relax. You know that the work will be done correctly and on time. That’s a massive weight off your shoulders. Outsourcing sets you free to continue making your business the best it can be.

About the author: Joyce Chou is a Content Marketing Strategist at Compose.ly, a B2B content creation platform that matches businesses with vetted freelance writers.

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