The 3 R’s of Outsourcing: Reasons, Risks & Rewards

As the owner of a company, you would have definitely thought about outsourcing one or more aspects of your business. You are aware about the benefits of outsourcing, but want to know if there is more to outsourcing than just the bottom line. Before you outsource, you want to know why companies have taken the outsourcing route.

Well, you can get your questions answered by knowing more about the 3 R’s of outsourcing (Reasons, Risks and Rewards):

The reasons why companies outsource

  • To effectively reduce and control operating costs related to hiring new employees
  • To improve company focus and to concentrate on core business activities
  • To get access to exceptional capabilities at a cost-effective price
  • To free up internal resources for other important work
  • To make up for the lack of internal resources in a specific domain
  • To maximize restructuring benefits
  • To manage a business function that is difficult or gone out of control
  • To make capital funds available
  • To reduce risks

The risks related to outsourcing

When you hand over a part of your business to an outside vendor, there is always a certain amount of risk involved. Before you outsource, it’s good to be aware of the possible risks involved with outsourcing:

  • Some business functions cannot be easily outsourced. Be sure you hire a qualified vendor with experience in handling the function that you wish to outsource.
  • If you don’t stay involved with your outsourced project, you may lose control over it. Make sure that you hold regular meetings with the vendor or you could ask for weekly/daily updates on your project.
  • When outsourcing, there is always the question of the security of data and disaster recovery. Choose a vendor who offers complete security and effective disaster recovery plans.
  • You may get “locked in” once you sign a contract.

The great thing is that you avoid these risks altogether if you know what to look for in an outsourcing vendor and if you ask the right questions before you hire a vendor.

The rewards the come with outsourcing

  • You can get access to the latest and best in technology, without the worry of keeping up-to-date with the ever changing face of technology.
  • You can enjoy great cost benefits on your overheads.
  • You get high quality staff to work for you at an affordable cost.
  • You can benefit from greater flexibility, as an outsourced vendor will have several resources at hand.
  • You can take the extra burden off from your regular employees and utilize them only for core business activities.

Now that you have seen the reasons, risks and rewards associated with outsourcing, would you like to give outsourcing a shot?

Read our list of services to find out more about the services that you can outsource.

Got a question on how outsourcing works or an experience with outsourcing that you will like to share? Let us know by leaving a comment in the box below. We, at Outsource love to hear from you.

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