Companies like the idea of being self-sufficient, being able to create and manage everything that your processes and clients need, and having the internal team always at hand. This, in theory, is perfection, paradise. But sometimes the reality can be a little different. Sometimes unforeseen events arise that reduce the capacity of companies, or they do not have enough equipment to face the challenges of the moment. This is where the benefits of outsourcing come into play to empower businesses.
Software outsourcing is becoming more and more common in the technology industry, as it allows speeding up software development, and getting quality developers and engineers, no matter where they are in the world. It is an external, temporary work modality, with resources that enter the project to fulfill a certain function. And the company simply pays for the working hours, without acquiring other administrative commitments.
It is true that the pandemic has accelerated the adoption of remote work due to the great benefits of outsourcing: according to figures shared by the Findstack portal, at least 45% of companies have planned to increase outsourcing collaboration since 2020, focusing on finding those skills they don't have in their internal team.
The number 1 reason why companies delegate projects or tasks to outsourcing teams is to reduce costs: at least 70% of companies do so for this reason. Outsourcing services reduce the costs associated with hiring in-house staff.
What are the benefits of outsourcing?
Of course, before implementing this type of work in your company, you need to know what the benefits of outsourcing will be that you will receive in return.
- You will reduce costs since the payment of this outsourcing service is usually done by the hour. Depending on the country where you hire, the service may be cheaper than hiring resources in the country where the company is located.
- Efficiency is raised, by having a qualified and experienced workforce, refers to an article on the CIO portal.
- You increase the capacity of your base equipment.
- Among the benefits of outsourcing is that your team will focus more on strategies, while the outsourcing team takes care of the rest.
- Outsourcing gives companies access to resources with specific/special skills.
- It provides companies with the flexibility to face market changes and adapt to new requirements.
- Access to innovation, new technologies and tools.
What are the advantages and disadvantages of outsourcing?
The benefits of outsourcing are many and we have just seen them in the previous part of this blog. Now we will talk about the advantages and disadvantages of this type of work so that you can evaluate them and see if they adapt to your business context.
Advantages of outsourcing
- You do not have to hire more permanent employees, because through outsourcing services you can hire temporary staff. “When you subcontract, you can pay like a contractor. This prevents you from having to make a fixed contract, which implies higher administrative and training expenses”, they detailed in a Forbes article.
- One of the best benefits of outsourcing is that you can find that resource with the skill you need. Outsourcing companies usually have an extensive database of global professionals, where you can find the professionals your project needs.
- Your internal team will be able to dedicate themselves to the core tasks of the company since by outsourcing an external team, they will be dedicated to routine and daily tasks.
- It increases efficiency, "because by choosing an outsourcing company that specializes in the process or service you want to develop, they can help you achieve the expected goals and be more productive and efficient, with higher quality," they pointed out on the NIBusinessInfo portal.
Disadvantages of outsourcing
There are some aspects that leave companies hesitant when considering hiring an outsourcing service. The benefits of outsourcing are many and proven, but there are certainly some aspects that must be taken care of.
Among the disadvantages are:
- The service provided by the provider may be delayed or below expectations, NIBusinessInfo explained. For this reason, the experience of this supplier must be carefully evaluated before finalizing the contract.
- Although the benefits of outsourcing are great, confidentiality and security may be at risk if limits and work rules are not established in a timely manner.
- Little flexibility, if the contract is too rigid, you will not be able to adapt to this outsourcing work modality.
- The management of this outsourcing team can be complex, with friction due to cultural differences, values or the language barrier.
- In a catastrophic scenario, the outsourcing company could close unexpectedly, leaving your project up in the air and incomplete.
Different types of outsourcing
The benefits of outsourcing are as broad as the word outsourcing itself. A company can resort to outsourcing to outsource any type of work or area, not just technology. Therefore, now we will see the different types of outsourcing that you can access for your business.
Business Process Outsourcing
This is traditional outsourcing, referring to the general management of a company.
Professional Outsourcing
It refers to advisers, consultants and agencies, the portal Outsource Accelerator indicated.
IT Outsourcing
It is the outsourcing of technology professionals or technology services.
Process-Specific Outsourcing
When a specific function of a business is outsourced.
Project Outsourcing
When an outsourcing team has delegated the development of a project.
Offshore outsourcing
When the outsourcing provider is in a country far away from the company that contracted it, they usually handle another language and a different time zone.
Onshoring
When the outsourcing provider is located in the country of the company that hires it.
Nearshoring
When the outsourcing provider is located in a country close to that of the opposite company, similar culture and similar time zone.
Why is outsourcing a good idea?
Improve the performance of your company
“Outsourcing professionals, as experts in their areas, will know how to handle every aspect of your project in detail, thanks to their years of experience and training. Experts get the job done quickly and efficiently. Outsourcing also reduces the risk of costly errors”, they pointed out in the Solution Services portal. One of the main benefits of outsourcing is this, that it improves the performance of companies.
Tax exemptions
“By conducting business abroad, companies can take advantage of lower corporate tax rates. Countries like Ireland, Hong Kong, Singapore, and Taiwan have very low corporate tax rates”, highlighted in the Supply Chain portal.
Release of internal resources
The most valuable thing in a company is the team that accompanies you and promotes growth. But if you have that internal team overwhelmed with routine work, they won't be able to realize their full potential. By outsourcing the mechanical and day-to-day work to an outside team, the core team will have time to think of new strategies to keep the business growing.
We are sure that working through the outsourcing modality will completely boost the performance and productivity of your company. You just have to make sure that the technological partner that is going to accompany you in this process is the most qualified, has the right experience and a work culture similar to yours so that you can be synchronized. Take advantage of the benefits of outsourcing!
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