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5 Reasons You Should Outsource

in Beginner, Fundamentals / 2 Comments

A quick review of any cross section of large companies suggests that outsourcing is a great way to increase productivity and reduce costs.

These two factors are the main reasons why small companies and entrepreneur alike are turning to outsourcing to compete on a global scale.

The availability of freelancers on sites like Elance and Odesk mean that even the smallest of businesses can hire staff for projects that were hitherto unachievable.

Outsourcing has always had its place among businesses but many roadblocks stood in the way from it becoming economically feasible. Advancements in web technology have played a major role in making it very attractive over recent years, with no signs of slowing down.

Some of the reason you should consider outsourcing are:

  1. The availability to utilize niche specific knowledge and expertise from an array of industry experts for projects that your company may not be expert in.
  2. It gives you the ability to flex your capacity up or down as business dictates. This is not only cost effective, it is more productive as it reduces the learning curve of potential new employees
  3. You do not incur the cost of hiring and training additional staff or the expense of laying them off if business slows down.
  4. There is no cost for benefits for employees when you hire them on as independent contractors. This reduces your liability in the areas of workers compensation. This could be a substantial saving especially if in the unfortunate circumstance of an injury.
  5. Free up human resource capital to focus on tasks that are more important to the overall function of the company.

All these elements add up to reduced costs, increased productivity, and in many cases a reduced time to market. Speed to market can be a major factor as more and more companies migrate towards “just in time” inventory schedules. Just in time inventory requires less capital investment, which means your customers money is not tied up. This could result in upward price mobility for your product or service.

Also the ability to have pricing traction is important as you progress into the future. Costs increase and you have to be able to pass some of these costs along in the way of price increases to your customers. The faster you are to market, the better you set yourself up for success.

Outsourcing can make you more competitive in your niche market and even provide an edge on your competition. Most companies will pay more for a product or service that has the ability to have a fast turnaround. It is money in the bank for them and you.

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Discussion 2 Comments

  1. Akshat Sethi

    Technology will definitely play a vital role in outsourcing in the future. One benefit I can see is the use of video conferencing. It gives a feel of being in the same office.

    • Outsource How

      Very true, Akshat. Even using a webcam and regular Skype contact between collaborators is a great way to stay in touch and on goal – not to mention getting to know each other as real people!

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