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Why Should A Business Outsource?

Randy RayessRandy Rayess

Today, outsourcing business needs is common place at both the start-up and enterprise level . There are many reasons why both types of companies should consider outsourcing.

Focus on Core Competency

It can be difficult for a company to do everything in house as resources and labor hours are often scarce. At times, it doesn’t make sense for a business to hire a full time development, legal or design team. By outsourcing, a business leverages expert knowledge, focuses on their core competency and can accomplish tasks more rapidly.

Ability To Stretch Budget Further

Small businesses often have budgetary restrictions and can leverage the lower cost of living outside of the US to save money. By outsourcing, businesses avoid the hassle and challenges that come with full time employees, including fixed cost, more office space, and insurance.

Rapid Innovation

When enterprises experiment with innovative projects they prefer to outsource instead of hiring a full time team. This is because they do not want to go through the whole process of hiring and firing a team if the project fails. Firms prefer to outsource at the beginning and then if successful, build a larger in house team that works alongside the outsourced team.

Around The Clock Work

If North American firms outsource to countries in Eastern Europe, the Middle East and Southeast Asia, then the time zone difference allows work to be accomplished around the clock. A US company can send off work at the end of the day to the outsourced firm. A word of caution: In order for this process to work, there must be clear communication and preferably two hours of overlap so that each side is clear on what has been done. Without overlap, a question could arise while the other team is asleep slowing down development.

Scale Teams Quickly

It is easier to scale software teams outside of the US because there is a larger supply of tech talent and the demand is lower. This means that a firm that wants to quickly build out a software development team can do so with fewer problems hiring abroad than they would have in the US. We recommend starting with a small team and once the small team understands the business then they can lead and hire a larger team. If the company is looking to build a standalone product or is at the enterprise level, then they can scale the remote team much faster. Large enterprise projects require many people but the key is to have great project management and communication. It is important to have a very strict and optimized selection process for who you hire to make sure that you select the best people.

Outsourcing, if done correctly, can be beneficial to both small businesses and enterprises. What aspects of your business are outsourced?

CoFounder at VenturePact Passionate about software, marketplace startups & remote work. Previously at SilverLake Partners, Ampush and Wharton.