In 2019, businesses spent $92 billion on outsourcing, on the rise after a brief outsourcing decline in 2015/16.
But while this figure may make outsourcing seem like a business expense, it’s vital to understand that businesses that outsource do it because it makes the most sense for their company. In any regard, it’s a strategic decision built on ample industry, market, and company research.
Often outsourcing technology, marketing, manufacturing and more is a smart business decision. But it’s vital to consider why or why not to outsource.
Eric Weast, a Fort Lauderdale IT services provider with ECW shares his experience with outsourcing IT vs. contract IT services.
The Most Commonly Outsourced Roles
This list likely won’t come as any surprise. Some of the most common outsourced roles include:
- Digital Marketing
- Web design and content creation
- Logistics and supply chain
- Customer care
- Tax prep
- Technology services (cybersecurity, help desk, integration, etc.)
- Training and development
- Machinery design and development (for factories)
What do many of these roles have in common?
Each of these roles experiences an ebb and flow of need within your organization. When you need support, you need to be able to scale quickly. You don’t have time to recruit and hire. But you also don’t want to have to lay people off every time the workload drops, as it inevitably does in these areas.
The Pros Cons of Outsourcing Technology Services
This leads us to the pros and cons of outsourcing. Businesses need to not only understand these advantages and disadvantages. They also need to realize many of the disadvantages of outsourcing are no longer cons when you know how to outsource effectively.
Pro: Flexibility + Stability
Flexibility and stability may seem opposites. But you can have both through outsourcing. When you outsource technology services, you have the flexibility of only paying for the services you need. But you also get instant stability, because you’re working with a company that has invested in the hiring and training of employees who’ve been doing what they do for some time and can put those skills to work for you.
Pro: Instant Access to Top Talent
When you outsource, you gain instant access to top talent and advanced technologies that you would otherwise have to hire and develop in your own company. This means if your company is lagging technologically, you can quickly bring itself up to 2020 technology standards to meet modern customer demand.
Con: Greater Risk to Data Security
Higher risk when it comes to sensitive business or customer data. It’s essential to manage this risk by working with a company that has high standards and systems in place to protect confidential information. This is doubly true if you’re in healthcare, finance, education, or another industry where regulations are stringent.
Pro: Enhanced Data Security
If you’re currently not well-protected against threats like ransomware, phishing scams, social engineering and malware, then outsourcing technology services can reduce your risk instead of increasing it because these companies have the expert talent within their organizations who know how to keep you safer through state-of-the-art monitoring, software, and cyber-protection strategies.
Con: Unexpected Costs
An outsourcing company will quote a price, and you’ll both sign a contract. But despite precise planning and an understanding of business needs, unforeseen costs can arise. You must work with a business outsourcing company that communicates well to keep you informed about possible costs on the horizon.
Pro: Improved Efficiency
Technology outsource companies invest in good people and strive to keep their talent. They focus on streamlining efforts and technologies to help them make the best use of resources and deliver the best service to business clients. They provide optimized efficiency you might have to work years to achieve otherwise.