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Oct
9

The Meaning Of Outsourcing
Posted at 2:41 am | Comments (0)

Ask any group of business owners about the benefits of outsourcing and you’ll get as many answers as you have people – simply because the perceived benefits directly related to each companies industry and in-house capabilities.

So, for manufacturers this may mean increasing their production capacity via using a Chinese company to pump out widgets, for an accountant it may mean off shoring all the data entry and calculation elements of their business whilst they take care of the frontend and decision making with the clients.

But what does that mean for an IT Company that builds website, software or does digital? Why do they outsource?

• Is it……….Cost Management: I don’t mean having someone work for $5 an hour. The benefit lies in having a partner who can take on a deliver their projects behind the scenes all year round, without them having to commit to spending large amounts on their own local / in-house team. Over a 12 month period, the savings and increased flexibility of having an offshore, but closely integrated partner can be significant, as your expenses are directly tied to your cashflow. You only pay out, when you are making money and you have the flexibility to decide what to do in house and what to send offshore.
• Is it……….Removing the headache of HR: Ever tried to manage 40 staff? If you have you’ll know the work involved and the support staff required just to keep the machine turning. When outsourcing this problem is removed as you deal with only your appointed team leaders and the rest ‘just happens’.
• Is it……….Freeing them up to be creative: but having a partner who can take care of the hard-core coding?
• Is it……….Expanding their skill set: Often, companies have the right contacts and project management skills to define, manage and win large projects, but not the in house capacity to code, test and deliver them. A offshore partner can provide this help and capacity.

What does outsourcing mean to you?