What is Outsourcing?
If I state that outsourcing is akin to ensuring your work is handled in the best possible manner by an expert, you may wonder, ‘But how?’. Well, outsourcing, in simple terms, is handing your work to someone or some organization that possesses the relevant skills to meet your project requirements.
The service provider, in this case, the outsourcing company selected by you after rigorous research, is the ideal candidate for taking over your project. The best part about all this is they provide services at reduced costs, ultimately benefiting your company.
Recently, outsourcing has gained widespread popularity, but the practice has been around for decades. It also significantly contributes to the economies of several developing nations.
How does outsourcing work in the IT industry?
With IT services accounting for 72% of all global outsourcing contract values, the IT sector dominates the outsourcing market. It is undoubtedly an integral external resource that is being utilized to its maximum capacity in the whole world.
Outsourcing IT projects is a fairly easy process, hence its popularity. The business searches for the best outsourcing partner who can closely handle its requirements in a number of different areas, such as quality control, software development, digital marketing, and app development.
Outsourcing companies employ people who excel in their fields so that their services are reliable. For example, if a business requests the development of a mobile app using Flutter, the outsourcing provider will ensure that the task is assigned to a Flutter expert.
Debunking common myths and misconceptions about outsourcing
Outsourcing myths are so prevalent in the business world that a large majority of people have garnered negative feelings about the practice. We are here to debunk common myths and misconceptions about outsourcing so you can embrace it to its utmost potential for your company.
Quality is compromised in outsourcing
Lack of quality in outsourced projects is a major misconception that convinces many people to refrain from outsourcing. However, quality suffering can be an issue even if you work with in-house employees, so this problem is not exclusive to outsourcing.
In fact, it has been widely noted that outsourced projects typically have higher quality standards because a specialized team of workers manages them, and the outsourcing company strictly adheres to quality assurance protocols.
Moreover, external providers also make use of advanced equipment and techniques to ensure their services are top-notch, which also leads to enhanced project quality. Adherence to quality metrics, especially in IT projects, is strictly maintained to provide comprehensive reviews to the original project owners.
A product that fully satisfies the needs of the client company is developed as a result of back-and-forth communication, which includes quality monitoring and follow-up checks between the business and outsourcing organizations.
The company has to bear extra expenses
Outsourcing cannot be categorized as an extra expense as it is not an add-on to your business. Instead, it is a comprehensive solution to your development and management problems. Outsourcing doesn’t strain the company’s finances since it’s an affordable way to benefit from specialized services.
The practice effectively reduces the cost of development, particularly in the IT industry, as several companies provide their services at affordable rates, Codesy being one of them. Therefore, it can safely be said that outsourcing adds extra expenses, which is a baseless myth.
Only large corporations practice outsourcing
Outsourcing is an all-encompassing activity that a business of any size can adopt. Prior to outsourcing work, companies set out goals such as cost-effective solutions, flexibility, and speed to market. All businesses, regardless of size, share these goals.
Small businesses can use outsourcing to assign low-priority tasks to other people while they focus on growing their business and other high-priority tasks. According to Clutch, 37% of small businesses outsource at least one business process.
Even though outsourcing is more common in large businesses, it is incorrect to think that outsourcing is exclusive to these kinds of enterprises.
Outsourcing is a complicated process
While the process may seem daunting and risky at first, once you delve into nits and bits, you will realize that it is a fairly simple process akin to hiring new staff. Most businesses find it complicated due to the work that is involved in finding a trustworthy partner who could provide the best services and also check all the other boxes.
However, it must also be taken into account that once you are over the part of onboarding the outsourcing company, everything is fairly straightforward from that point onwards. After developing good communication with the new team, you just have to hand over your set of requirements and wait for the service providers to do their magic.
In-house employees suffer from job loss
A common misconception that causes employees to dread outsourcing is the fear that it might cause them to lose their jobs. However, in reality, it is rarely the case that an employer feels the need to get rid of their already existing staff just because some work has been outsourced.
While it’s possible that there isn’t much of a need to hire new staff, it is unacceptable to fire existing employees. Additionally, work is outsourced to relieve in-house employees of some of the workload, allowing them to be more productive and maintain a healthy work-life balance.
Lastly, outsourced work may only include a small portion of projects handled by the business, so they still require in-house employees to focus on other tasks.
The company’s data becomes prone to additional risks
Another stereotype attached to outsourcing is that it puts the company’s data at risk when shared with a third-party service provider. This is false because when you enter a deal with an outsourcing company, it legally binds both organizations to certain laws, which, if violated, can be legally challenged in court.
Therefore, the outsourcing company is bound to follow privacy policies and maintain the integrity of the data provided to them. They also go to great lengths to conform to security protocols on their own end, as failing to do so will damage their standing as a service provider.
Remember that your company has the legal right to raise concerns if it ever becomes apparent that outsourcing is putting your data at risk.
Outsourcing is the same as offshoring
Though the two share some similarities, outsourcing is a more generalized version of offshoring. In fact, offshore outsourcing is a business model that is derived from outsourcing itself.
Offshoring is the practice of employing developers or workers from outside the nation or establishing a service center in a completely different nation. However, outsourcing can be carried out both domestically and abroad.
Moreover, it is not about which one is better than the other, as both can serve the specific needs of the clients.
The company loses control over outsourced projects
This is a valid concern that most businesses share when they first start with outsourcing. In the business world, though, it is not realistic to lose control over your project because everyone is subject to rules and regulations.
BPO companies are meant to follow an invisible approach in all their dealings and report each and every progress marker to the business that they work for. It not only involves the original owners in the whole development process but also provides them with a good overview of how the task is being managed.
Diversified working environment creates inconsistency
When people from different countries and places come to work together on a single project remotely, which is often the case in outsourcing, one may assume that a lack of uniformity in work culture may result in inconsistencies in the project being developed.
This is untrue, though, as the culture surrounding remote work has changed significantly in recent years and is no longer representative of what it was many years ago. Additionally, more and more people are adapting to worldwide accepted standards so that they are capable of rendering their services on a global basis.
Being able to communicate effectively in English is just one way that people are preparing for the global job market and lowering their chances of running into language barriers at work.
Outsourcing cannot be relied upon for long-term projects
Contrary to popular belief, outsourcing is not just a temporary solution to a company’s needs. It has the capacity to be relied upon for both short-term and long-term projects due to its several benefits.
Many people believe that outsourcing is only ideal in cases where the project needs some minor fixes or alterations. Although outsourcing might be your choice for accommodating urgent needs, it cannot be limited to only providing short-term solutions.
According to YouGov, 70% of British B2B companies outsource their key business operations to third-party service providers, 34% being IT companies. Based on this information, it can rightfully be stated that core business activities can also be outsourced.
Are there any benefits of outsourcing?
Outsourcing has proven to be very beneficial for businesses all over the world in terms of cost reduction, quality enhancement, increased diversity, addition of expertise, etc. While some people may believe the outsourcing myths to be true, the benefits are still hard to look over.
A few benefits of outsourcing are described below:
Improves scalability and flexibility
Businesses, particularly IT companies, place a high value on flexibility. For example, remote work is currently very popular in the IT sector. When outsourcing comes in, it’s nothing but added flexibility and scalability in achieving tasks.
Your business could be located on one end of the world and hire an outsourcing company that’s geographically located on another side of the world or may only exist remotely. This makes it possible for businesses to implement agile practices and make the best use of all available business resources.
Brings in new expertise
Outsourcing goes a long way in adding new expertise to the team. As mentioned above, third-party service providers work with people who are extremely skilled at their jobs. Sometimes, the businesses that outsource their work are not even aware of the skills that are prevalent in the market.
Therefore, through outsourcing, they are exposed to new talent, which serves as an asset to the business in the long run. It not only helps the business expand its team but also lets it explore different avenues that benefit the company.
Helps business to focus on other crucial activities
Businesses outsource all kinds of operations, including key and non-key activities. When work is outsourced to a reliable partner, it lets the business shift its focus to other important tasks that are pending or need immediate consideration.
It allows the in-house employees to destress and develop better focus, ultimately leading to increased productivity and good metrics for the business.
Outsourcing – Is It Worth It?
Given the rate at which companies outsource their business operations, it is noticeably clear that the practice entails several advantages. Although a major chunk of people still believe in the myths about outsourcing, many are making use of outsourcing regardless.
Whether it is the IT industry or any other, outsourcing yields positive results in all domains. Companies, especially B2B, rely heavily on outsourcing to accomplish their goals.
If your business tends to find itself in a tight spot where it could do with some outside help, do not hesitate to look for a trustworthy third-party service provider. If the outsourcing organization checks all the boxes for a perfect collaborative partner, then outsourcing is definitely worth it!
How is Codesy at the forefront of outsourcing?
When it comes to reliable outsourcing companies, we cannot help but mention Codesy Consulting. This company brings its extensive experience to the table along with expertise and business knowledge.
The company is home to a group of developers who specialize in various domains, including web and mobile development and digital marketing. Codesy guarantees 100% client satisfaction on every project that they undertake, which is truly a huge commitment.
So, get in touch with Codesy Consulting today and find a solution to all your IT outsourcing problems with guaranteed positive results.