Outsourcing has been the go-to strategy of growing businesses looking to tap into necessary talent without taking too much off their budget. With the right outsourcing strategy executed at the right time, companies can optimize their access to skilled labor and leverage their strengths in a way that keeps them competitive.
What are the best outsourcing strategies, and when should these be implemented? This article discusses some outsourcing models and provides tips on how to build a successful outsourcing roadmap that will support your company’s goals.
What is Strategic Outsourcing?
Strategic outsourcing is a long-term and result-oriented business relationship between a company and a service provider, where services include one or a mix of processes that aim to streamline operations and reduce costs. Simply put, it involves hiring a third-party firm to handle certain aspects of a business to tap into the latter’s expertise without investing too much on overhead and training.
The list of services can change over time as the company’s needs evolve. For the most part, the outsourcing service provider takes responsibility for an entire process cycle, covering operations itself, human resources, and technologies to deliver the results promised in the outsourcing contract.
Successful outsourcing is anchored on your plan, and there are different paths you can take to achieve goals. Take outsourcing app development as an example. Would it be more beneficial to delegate just the development activities to skilled third-party developers, or would it make sense to outsource the entire app department that includes design and marketing?
Choosing the Best Outsourcing Strategy
What are the best outsourcing strategies? There is no single answer to this question as it would depend on what your business needs. But you can kickstart your decision making process based on these three key types:
1. IT Outsourcing
This type typically delegates either equipment maintenance work or software development and network design and creation to a third-party provider that already has the resources and skilled talent to immediately get started. Setting up IT machines and processes in-house can be costly, and the expertise of certified IT professionals are definitely not cheap.
By outsourcing your IT needs, your core team can focus on actually growing your business and worry less about keeping your hardware and systems running smoothly and whether or not you have the right specialists to get the job done well. Third-party services already have the tools and the people to handle even the most advanced and technical tech requirements, enabling them to get started the moment you sign the contract.
2. Business Process Outsourcing
BPO refers to the delegation of internal processes to an external provider and covers areas such as customer service, human resources and hiring, accounting, marketing research, and more. Maintaining such teams in-house can easily eat into your overhead budget and can be a major blocker time-wise as employees will need to undergo skills training. Strategically outsourcing to a BPO frees up time and resources for your core team, while keeping your costs low.
3. Production Outsourcing
For many companies that handle large production cycles, setting up different stages of production and finding the manpower for these in-house is time-consuming, stressful, and expensive. Even the largest automotive firms outsource parts manufacturing to third-party providers. Ikea, which showcases thousands of products in its stores worldwide, delegates different production activities to more than 2,500 external partners.
This can also apply to growing businesses that do not have the resources or the funds to operate a production facility. You can outsource the manufacturing of an entire product or parts of a unit so you can focus on marketing your business and finding ways to increase sales.
Explore Strategic Outsourcing With C9 Staff
Whether you have a startup with a huge growth potential but limited resources or a large business with a massive production and manpower need, outsourcing is a strategy that offers many advantages. The first step to doing this successfully is determining which activities and processes you can afford to outsource and how this move will benefit your bottom line.
Partnering with an outsourcing company with a proven track record of devising solid strategies across multiple industries will help you stay ahead in an always demanding and competitive business climate. C9 Staff offers end-to-end offshore outsourcing solutions and connects you with elite-level talents and service providers from all over the world at a price that’s around 70% less than what you would pay for by taking these functions in house.
Call us today to learn more about how strategy outsourcing can benefit your business and how our team can help you succeed at it.