Outsourcing is not merely a process of delegating tasks to an external company; it’s a mindset and time-saving activity that allows you to focus on more important tasks. Ultimately, it enables you to think strategically and realize your aims for the year, providing a great way to care for and prioritize your startup.
In this article, we focus on the advantages of outsourcing IT and how it can contribute to the success of startups.
Outsourcing – A Business Concept
Many people may think that outsourcing is a new trend that has become more popular in the last couple of years. That’s partly true. The idea of outsourcing, not only in IT but also in general, as delegating tasks to other people, was created in 1923. So it has been around for a hundred years. The founder of this business attitude was Henry Ford. He believed that if something couldn’t be done cheaper, more efficiently, and better than the competition, it was a sign to find someone who could do it better. The whole concept started by Ford was called outsourcing in 1979 and referred to the British automotive industry buying German designs.
Today, it’s a new management strategy that involves delegating some part of startup tasks to another, more experienced company. This is a way to raise capital, share risk, and increase operational flexibility by quickly adapting the scale of operations to the demand for production factors.
How to Use Outsourcing?
Every company with which we want to collaborate must be verified. You have to be sure that it will be able to handle all delegated tasks at the best level. Besides that, you also have to be sure which tasks you will pass to them. There are two possibilities:
- Full outsourcing: You, as a startup, sign up for a comprehensive service agreement.
- Selective outsourcing: You choose which part of the tasks will be delegated to the company.
What to Delegate?
In the beginning, you have to define what your main business is and what the real value of your startup is. All tasks connected with that are supposed to stay in the company and be done by you or your employees because you know your company the best. Outsourcing has a supportive function; it should support strategy and not replace it. You can also easily entrust simple tasks such as cleaning, security, or catering to external contractors.
External companies can carry out projects for us that improve business processes, increase the company’s competitiveness, and reduce costs. They can also handle tasks that lead to the creation of a ‘virtual organization’ or may transform into lasting strategic alliances.
The most popular areas outsourced concern the administration of human resources functions, training, administration of IT systems and many more.
Advantages
The main and basic plus is cost reduction. Specialized companies perform their tasks much more affordably than big corporations. However, there are management boards that are beginning to appreciate the fact that, thanks to outsourcing, they can strive to provide services at the highest level, work specialization, focus on business functions, and acquire specialized knowledge.
Outsourcing allows the concentration of forces, resources, and managerial processes on the core objectives of the company. This results in improved performance and an increase in market value. The company enhances the flexibility of its operations, while also boosting efficiency through time and human resource savings.
Within the outsourcing industry, like in any other, there are superior and inferior companies. Opting for an inexperienced or inadequately staffed company may lead to a lower-than-desired quality of services. It is crucial to ensure that you retain control over task implementation and prevent the leakage of confidential data.
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