Is outsourcing right for your next project? And how can you tell?
It’s true - we think outsourcing works. It’s also true that we’ve got a vested interest! We offer top quality outsourcing to clients all over the world. However, that doesn’t mean we think outsourcing is right for every company or for every project.
Outsourcing brings vast opportunities for companies to scale quickly, react fast to changing market demands, and test out new ideas without the traditional setup costs. But outsourcing can also fail if it’s done for the wrong reasons or with partners who are inexperienced, overstretched, badly-managed or who focus on cost-saving over quality work.
Here are our top pros and cons to help work out whether outsourcing is a good fit for your next project.
Cost efficiency is a big motivator for outsourcing. It’s possible to find the same or better quality for the same or less money by outsourcing the work. That’s especially true if you can avoid substantial setup costs of new ventures. As long as the right quality, processes and management are in place, outsourcing can drive your profits up.
Not all outsource teams are transparent enough about what they do and how they do it, which can lead to less visibility into your processes than you are used to.
A good outsource team is ready to hit the ground running. Recruiting great talent and developing the right culture in-house takes months - sometimes years. You can get things moving rapidly by bringing in an existing external team while you grow your internal capacity.
On some projects, having your outsource team on a similar or overlapping time zone is vital. That’s not always the case - for routine work written communication is more than adequate - but for complex projects, regular phone calls are important to avoid miscommunication. It’s a good idea to be realistic about how often you’ll want to be able to talk on the phone with your outsourcers and choose them accordingly.
One of the biggest benefits of outsourcing is the ability to keep your team focused on their core competencies, without getting bogged down in administration and things they aren’t experts at.
It’s essential to think carefully about how you’ll maintain the level of quality your customers expect. Sometimes, and especially when outsourcing is done purely to save money, the end product can seriously suffer by bringing in a team who are just worse at what they do.
Sometimes it makes sense to bring in experts to take on some parts of a project, allowing you to focus on what you do best and delivering the core experience to your customers. Those times, increasing your costs initially can save you money in the long run, by keeping internal work focused on the most critical aspects of your business development.
It’s not always possible to choose who in your outsource team actually works on the project. If the outsourcers are poorly staffed or poorly managed, your star developer may regularly get pulled away onto other projects. That can lead to instability and delays that are out of your control, possibly leading to loss of service.
By bringing in a specialist outsourcing team for a new project you avoid the costs incurred in finding and hiring new talent, putting working infrastructure in place, and creating new back-end systems to support the increased team size.
It’s not always easy to know how many competing projects your outsource team is working on. Difficulties and delays on projects for other companies could impact your own schedules and deadlines. Check your outsource team aren’t spreading themselves too thin.
Changing or finishing an outsourcing contract is usually much easier than downsizing or rearranging an internal team. It also tends to have much less of an impact on morale and team cohesiveness. Using outsourced teams you can grow and shrink your overall team much more efficiently, which lets you stay agile.
Outsourcing can help you scale up your business, increase profit margins, and test out new ideas without the usual investment. It can also be the quickest way of bringing in expertise.
However, it’s important to consider whether it’s right for your project, and we hope this list helps you ask the right questions.
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