To outsource or not to outsource; that is the question!
Outsourcing is a business-altering decision. You cannot simply toss a coin or pluck flower petals to reach a conclusion!
It needs to be a strategic process. You need to know if it is the right time to outsource and if your organization is actually ready for it or not.
Many organizations have been succeeding with outsourcing but the number of firms that have seen failures is also not very low. This happens because they are not sure about when to outsource and if outsourcing is the right decision for them.
So, here are some questions to ask yourself or make your team answer before jumping into any conclusion about outsourcing.
Also Read: Outsourcing Web Development? Ask These Questions First
One of the main questions that you need to ask yourself before coming to a decision is if it would help your company grow.
Every decision that a company takes, growth is always at the root of it. Whether it is to branch out, start a new campaign, or launch a new product, every business shares at least this goal in common - growth. So, even when you are thinking about outsourcing to India or any other country, growth should be the bottom line.
So, you need to ask yourself as well as your management if hiring an outsourcing company can help your business propel forward. And more often than not, deep research within your business operations would make you nod in affirmation to the question. Especially for the entrepreneurs, having a company to partner with for outsourcing software development can be a way to growth hack their way to success.
Taking a pragmatic view of outsourcing- it means adding efficiency.
In layman term, by outsourcing your business operations, you get to hire the best talent from across the globe for your operations. There are many ways in which outsourcing helps your business grow.
You add a huge skill-set to your team
Outsourcing speeds up the operations and adds to its quality.
When you start outsourcing, your in-house team is freed up from the extra work and can focus on the core business operations and delivering results.
Outsourcing helps you get access to the larger information source and knowledge base which opens new ways for business growth
By outsourcing, a company can even solve the operational issues that are hindering the company’s growth
You can join hands with outsourcing web development companies that are at the forefront of technological innovation and grow your presence in the digital landscape.
With outsourcing, you hire masters of the trade instead of making your in-house team multi-task and drop 40% lower in productivity.
With so many advantages at your disposal, your company’s growth is inevitable with outsourcing.
As discussed in the above question, outsourcing frees your in-house team from the additional work and lets them focus on core business operations. So, here’s the next task at hand before deciding to outsource software development.
Look around you.
Do you see a team happily engrossed in work?
Or, do you see a team battling to meet deadlines and frustrated with so many tasks at hand?
Are they able to focus on their current process at hand?
Or are they simply working to tick of tasks quickly off the checklist?
If your team is working peacefully and not juggling with many tasks, you need not worry. However, if there is tension in the team for missed deadlines of core operations, you need to ask yourself this question - ‘Can outsourcing improve my team’s capabilities?’
Many organizations wonder that their in-house team is efficient in performing the task and they do not need any external help. However, making your employees multitask is only making them less productive and eroding their capabilities. Many studies have concluded that multitasking can reduce the productivity of any individual from 40% to 60%. It stresses your employees and they end up focusing less on either of the tasks.
Asking your in-house team to focus on the non-core as well as the core business operations creates attention residue. This is a situation where your employees would be working on your core operations while still thinking of the other operations. They’re thinking of two things at the same time and not giving their best to either of them.
What you need to do is set-up a remote team that would on the project while your in-house team focuses on the core operations.
So, putting in a nutshell, if you can see your in-house team juggling with tasks and failing to deliver quality in main operations, outsourcing or working with remote tech teams can be effective in improving the in-house team's capabilities.
Advice that most business gurus share about outsourcing revolves around the operations that you outsource. They state that one should not outsource the core business operations.
However, if any business operations require extra time, efforts, and money but are outside your core operations, you can certainly outsource those. There’s very little use investing the same efforts and resources in other tasks as you would for core operations.
The question you should be asking yourself is if your business also has certain activities outside the core operations requiring similar dedication and resources investment. It won’t be wrong to say that focusing the same energy on these functions would deter your attention from the core operations and even lead to quality concerns.
Hence, if you have some non-core business activities, outsourcing can be the solution.
For example, you might be working in the healthcare sector. However, you are aiming to create a product or software that would automatically record patient data, process insurance claims, manage appointments and payment, etc. In such a situation, you can certainly join hands with a digital innovation company.
This way, you wouldn’t need to deter from your core operations while a software development outsourcing company will work dedicatedly to develop and deliver the product.
One of the major advantages of outsourcing is that it frees you up from the extra tasks and helps you focus on your core business operations. So, if there’s some business operation that you can outsource, you should do it. You need not invest your precious time, resources, and finances. Delegate the task to an outside team and get your work done by experts in the niche.
When it comes to the digital ecosystem, there are several risks associated with running a business. While managing risks is a part of every business leader’s profile, finding ways to mitigate the risks is a solution that many prefer.
As outsourcing is a strategic business decision that aims to take a business forward, it should help mitigate the risks that might hinder growth.
So, the next question that you can ask is if outsourcing would help mitigate the risks surrounding your business. There are three types of risks associated with any business. These are:
Reputation Risk: This risk is connected with the most important aspect of any business - the customer. Your brand’s reputation is always at risk when you are in the customer-serving business. You need to ensure outsourcing offers even better quality to mitigate this risk.
Financial Risk: This is the risk associated with the money when you plan to upgrade the IT systems. So, you need to assess if investing the money would be the right decision and outsourcing should be the smart way out.
Competency Risk: This risk is associated with becoming obsolete and out-dated if the competency is not increased. By outsourcing, your company should be able to mitigate this risk as you can add the latest technology stack expertise to your business.
No matter what the risk, outsourcing can be the ideal solution. It can help you mitigate and manage all these risks while also ensuring business growth.
If we talk about reputation risk, quality assurance and compliance are a part of your outsourcing contract. Hence, you always get quality and your brand’s reputation among the customers is never at risk.
If we consider the financial risk, it is well-discussed that outsourcing saves money. It reduces costs as you save on the infrastructure cost, talent acquisition cost, and much more.
If we consider the competency risk, it might be difficult to cope with the advancements in the IT and technology sector in-house. However, outsourcing offers you the easy way to stay updated with the latest technology to gain a competitive advantage as well.
The question of whether you should outsource or not depends largely on your business health, current situation, growth plan, and your competency. It depends on where your business’s interest lies and what you intend to achieve. The risks in your industry and business process should also be taken into account while making a decision.
Ask the questions discussed above and also weigh your answers with the explanation we have given in each of them. This would help you make a more informed decision.
Make sure you know that the time is right for you to outsource software development and choose a company that can help your growth.