If You're Ignoring This Service, You Could Be Costing Your Business Money Ignoring the benefits of outsourcing leaves your business at an enormous disadvantage.
By Patrick Ward
Opinions expressed by Entrepreneur contributors are their own.
Outsourcing has been plagued since its inception. Some companies proudly position themselves against it. Others do it on the sly, manufacturing an illusion they do everything in-house. Ignoring the benefits of outsourcing and trying to do everything on your own leaves your business at an enormous disadvantage — a disadvantage that may be too great to overcome.
Outsourcing has often been considered a dirty word in the world of business. Companies, all too quick to take full credit for their success, like to present a brand illusion that they are entirely responsible for their good fortune. They prefer to hide their partners behind a veil of brand messaging and stifling NDAs. Even companies who've heralded the benefits of outsourcing can succumb to pressure to turn their backs, albeit partially, on outsourcing in favor of insourcing.
In my industry of software development, outsourcing has often been further disparaged. It has been synonymously compared to a range of alternative phrases such as offshoring and nearshoring, all invoking low cost and low quality.
Despite all this negativity, outsourcing continues to stay strong, with an industry worth an estimated $92.5 billion. The benefits to your business can be immense. Not only to your bottom line but to your entire business model. You can enable yourself to focus on the activities that you are uniquely positioned to perform best, while outsourcing other activities to experts. With that in mind, let's bust some outsourcing myths and look at how businesses can yield the benefits of outsourcing while avoiding the pitfalls.
Outsourcing is only for simple tasks
This outsourcing myth is patently false. Even entrepreneurs with the best of intentions fall victim to this myth. They act like the only tasks that can be effectively outsourced are those that have clear, rigid standard operating procedures, devoid of creativity. Many tasks do fall into this category — data entry and scraping come to mind. But this narrow mindset neglects an entire industry of far more complicated tasks, such as direct response copywriting, video production and even software development.
These all require substantial training and education on the part of practitioners and it is in this truth that the benefit of outsourcing lies. In a competitive and at times ruthless marketplace like the one we find in the U.S., it is not sufficient to be merely good enough. The greatest economic rewards are earned by those who perform their craft at the highest possible standard. Given that all companies have limited resources, if you maintain all functions in-house, you inevitably cannibalize your company's ability to lean into the field it can dominate.
In a nutshell — outsourcing creates focus.
Related: 7 Things to Outsource Immediately to Scale Your Business
Outsourcing is only for saving money
The immediate association of outsourcing with cost does the industry a significant disservice. The underlying assumption is positively colonialistic — you're only outsourcing because you can't afford the best. In this situation, the best is implied to be America. As an immigrant that's lived here for six years and counting, you'll often find me agreeing with this statement. But as is often the case in life, there are no absolutes.
An example near and dear to me is blockchain development. One only has to turn to Buenos Aires in Argentina, a city rich in talent for all manner of blockchain applications including DeFi, crypto and NFTs. A talent pool that has been bolstered by sustained government investment in early tech education. And, a healthy population attitude towards alternative forms of finance (which may or may not be influenced by their highly volatile currency). In this example, outsourcing to Argentina is a prudent option.
By contrast, a U.S. company that tries to keep that same blockchain development function in-house faces two enormous challenges:
- They're competing with a $112.5 billion fintech industry in the war on talent.
- Assuming the struggle to compete with the big players, they'll likely be hiring a developer who has come out of a 16-week bootcamp. They could have had an Argentine with a Master's level collegiate degree for less.
Related: Pros and Cons of Outsourcing and Hiring In-house Staff
Culture clashes are inevitable with outsourcing
The final resistance to outsourcing usually relates to a fear that an outsourced team won't have the same values and culture as your in-house team. In today's globalized world, humans have never been exposed to more information about each other and our respective cultures. This concern is especially moot when it comes to Americans. If there's one thing America has excelled at in the last 50 years, it's exporting its culture, values and brands. You'll be hard-pressed to find an outsourced team that doesn't have some familiarity with America and its corresponding client expectations.
Outsourcing is not going away any time soon. Your business can benefit massively by reframing your perception and relationship to the industry and the term.
