The outsourcing economy has grown by leaps and bounds over the past twenty or so years. According to Statista (www.statista.com), in 2018 outsourcing was worth $85.6 billion USD to the world economy. And for good reason, as businesses and entrepreneurs learn that it’s sometimes easier—and cheaper—to outsource some business functions than to do them in-house. Simply put, outsourcing can help you and your business succeed.
Despite the growth of outsourcing, many companies handle most of their non-core business functions in-house. They create entire departments and staff them with professionals to perform functions that aren’t part of their business’s core. Fortunately, more and more companies have begun outsourcing such functions as administrative tasks, lead generation, customer service, accounting and other fiscal functions, IT, human resources, and in some cases, marketing. And before you decide that outsourcing some of your business functions is for the bold and innovative only, consider these three benefits of outsourcing that any business can gain:
Benefit #1: Improved focus
When you spend your time and mental energy only on developing and improving your core business product or service, while hiring out functions that aren’t part of what makes you unique, you can’t help but improve your overall efficiency and time-to-market. As soon as you let someone else do whatever it is you and your core group aren’t naturally good at, you free yourself and your staff up to do the big picture thinking, and you are now better able to create new products or improve existing ones, explore new lines of business, do research and development, and generally be the visionary that you are. With this improved focus you also retain a better sense of who you are. There’s an old phrase, “Jack of all trades, master of none,” that describes someone who is good at a lot of things but not great at any one thing. Today’s world is too competitive a place for you to not be spending all of your time and energy on your core business. By outsourcing ancillary business functions, you keep your focus on doing what you do best, every day, all the time.
Benefit #2: Improved efficiency
Generally, a company you outsource a particular function to is also better at that function than you are. After all, it’s their specialty. And when you hire a specialist, you almost always improve both the quality and the efficiency of the task being performed.
Benefit #3: Improved profitability
Sure, outsourcing costs money, but the time and energy you’re now devoting to your core business is definitely worth more than what outsourcing is costing. In many cases, the businesses you outsource to can do the job for less than it was costing you do it. And any time you better allocate your time and resources, you improve your profitability.
Of course, you don’t need to outsource every non-core function, but chances are good that if you look, you’ll find a task or function that you can outsource, and when you do, you and your business will reap the above-listed benefits, and more.
Derek Rundell, is a successful business leader, operator, and serial entrepreneur. Derek has founded, managed and sold businesses in the technology, media and finance industries. He sits on several boards and serves as an advisor/investor to numerous established businesses and startups. Startups are Derek’s real passion, and in addition to building his own portfolio of technology, media and financial ventures, he invests in and mentors startups and entrepreneurs. He is passionate about sharing his knowledge and helping other businesses succeed.