Running a business entails multitasking numerous roles, which can be draining. All that routine work can distract you from the main tasks of your business. That is why it is crucial to decide what services should you outsource that will prove worthwhile in the long run and also fit into your business.
Outsourcing—getting assistance from external service providers for jobs that would normally be done in-house—has been a big deal since the 1990s.
It has been a go-to strategy for many leading companies over the years.
Because when done right, outsourcing can save time and money by efficiently using resources and potentially lowering labor costs.
Another perk is flexibility. You can outsource as much or as little as you need, for a short-term project or on an ongoing basis.
Consequently, it has established itself as a key element in enterprise resource planning.
For instance, Airbnb and Uber relied on outsourcing to scale up from small start-ups to billion-dollar giants in no time.
Even established giants like Google and Microsoft rely on outsourcing—Google for IT support and data management, and Microsoft for global customer support—enabling them to focus on core innovations and efficient operations.
It’s a fact today you can outsource nearly all parts of your business functions. However, simply because you have the means does not mean you should do it all. So, it’s important to understand when to outsource and when not to.
Your company can gain a lot by delegating some non-core activities.
So what are non-core activities? They are tasks that do not constitute the primary focus of your business.
For example, if you operate a healthcare facility, your primary focus is providing quality patient care. Non-core activities in this context include medical billing, patient scheduling, and administrative support.
So, here are the business processes and functions that you can outsource to enjoy the benefits of outsourcing.
You should outsource customer service:
Customer support is an essential part of every business and it’s very important to be taken care of. It’s quite problematic for large companies or e-commerce stores that experience seasonal spikes in demand to manage large customer service teams.
That’s why it’s one of the business processes that most companies outsource.
Furthermore, outsourcing allows for around-the-clock customer support, giving you an upper hand over your competitors and enhancing your brand image.
Thus, if you plan to cut costs and improve your customer experience (CX), outsourcing your customer support would be a smart move.
For example, Dell actively outsources its customer support, employing external teams in regions like India and the Philippines. This strategy allows Dell to efficiently handle a high volume of inquiries and provide round-the-clock support, especially during peak times or product launches.
Companies outsource IT services:
IT is another major sector for outsourcing. According to data, the average amount spent on IT outsourcing by businesses in 2023 was around $132.1 billion, while it is expected to reach $777.7 billion by 2028, growing at an annual rate of 11.07%.
The leading areas for IT outsourcing are web hosting, software development, and administration, which account for about 63.5% of the market value.
As an entrepreneur, your workload is always heavy. You’ve got to think about sales, marketing, product development, and many other things.
The last thing you want to worry about is your IT infrastructure. Unfortunately, this will be a concern if you don’t have a dependable IT team. For this reason, you should outsource your IT services.
A notable example of a company that has utilized IT outsourcing is General Electric (GE). Historically, GE outsourced a significant portion of its IT operations to enhance efficiency.
Human resource:
Human resources (HR) has greatly evolved beyond hiring, firing, and employee satisfaction. Today, HR encompasses a wide range of functions, including talent acquisition, employee engagement, compliance with labor laws, performance management, and workforce planning.
With so many critical responsibilities, the HR department often finds itself overwhelmed, requiring significant time and effort.
Key tasks, such as background checks, training, payroll administration, benefits management, and workplace safety, demand meticulous attention. These functions are not only essential for maintaining compliance and fostering a positive work environment, but they can also be incredibly time-consuming.
By outsourcing these HR services, companies can free up valuable resources and focus on their core business objectives.
For example, Walmart is a well-known company that has successfully outsourced its HR functions to streamline operations and enhance efficiency.
Similarly, small businesses like Tarzan & Jane have also chosen to outsource their HR services, enabling them to reduce costs and capitalize on the benefits of outsourcing.
You should outsource digital marketing:
According to a survey by HubSpot, approximately 63% of companies reported outsourcing at least one aspect of their digital marketing strategy, whether it be SEO, content creation, social media management, or paid advertising.
This trend is driven by the many benefits that come with outsourcing digital marketing services.
For instance, if you are a small business looking to outsource services like social media marketing or search engine optimization, you may find that hiring full-time employees would be significantly more expensive than partnering with a digital marketing firm.
Additionally, many tools used in digital marketing require monthly subscriptions, which you may not need continuously throughout the month.
As a result, outsourcing digital marketing has become one of the most common practices among companies. Rather than managing marketing campaigns and resources in-house, it is often more efficient to outsource these functions.
Several prominent companies outsource their digital marketing services, including HP, Ricoh, ESPN, L’Oréal, and Western Union.
Data entry tasks can be outsourced:
Outsourcing data entry tasks, such as processing orders, cataloging, scanning, and indexing, can significantly streamline operations. For instance, Amazon effectively outsources its data entry processes to manage vast amounts of product information and customer orders efficiently. This approach allows businesses to save money while achieving accurate results through the expertise of an external team.
However, it’s essential to exercise caution when handling sensitive information, such as credit card numbers or social security numbers. Despite these concerns, outsourcing remains a practical solution for the majority of data entry tasks.
Outsource creative work:
Many entrepreneurs believe they can handle their own designs, but few have mastered the necessary skills for high-quality results. To achieve better outcomes, it is advisable to outsource creative work to experts in the field.
By outsourcing design requirements—such as logos, business cards, letterheads, advertising banners, and website images—you can significantly improve the quality of your creative output.
This not only enhances your brand image but also allows you to focus on your core business activities while professionals manage your design needs.
Outsource web development:
Even though web development encompasses both creative and technical elements, it is often outsourced by companies seeking efficiency and expertise. Many foreign teams excel in web development, offering a range of services from coding to implementing ready-made solutions that can be customized to meet specific business needs.
However, not every web development project should be outsourced. This approach generally works best for routine assignments with tight deadlines.
If your project requires significant innovation or a high level of customization, having an on-site development team can provide advantages, as they can oversee the entire process and ensure alignment with your overall business objectives.
You should outsource cybersecurity:
Most times, we hear about big companies being targeted by cyber attacks but little do we know that small businesses are also at risk. Smaller enterprises may be targeted since they tend to keep valuable information such as passwords and credit card numbers in less secure places, making them easy prey for hackers.
Hiring the services of a cybersecurity company can save you money on legal fees. In addition, even a minor breach can now prove costly under tightening data protection regulations, thus negatively affecting your reputation.
Similar to how one wouldn’t use a lock built by himself for his home’s security, using DIY solutions for your business’s online safety should be avoided too.
Finding or even affording experienced specialists can sometimes pose a difficult task; hence, outsourcing this responsibility to a professional cybersecurity team is worth the investment.
It’s better to outsource video editing:
It’s a no-brainer, high-quality video content is crucial for effective marketing and brand communication.
While creating videos in-house may seem cost-effective, it often falls short in representing your brand effectively. The quality of your videos directly influences customer perception and can determine the success of your marketing efforts.
For example, promotional videos, tutorials, and customer testimonials all require expert editing to engage viewers and convey your message clearly.
Outsourcing video editing to professionals offers numerous benefits. Expert editors ensure that your content is polished and meets industry standards, enhancing your brand’s image. Additionally, this approach saves time and resources, allowing you to focus on your core business activities without sacrificing the quality of your marketing materials.
By leveraging external expertise in video editing, you can produce compelling content that captures attention, engages your audience, and ultimately drives business growth.
Most companies outsource accounting services:
Other than IT services, accounting services is another mostly outsourced business process.
When we think of accounting, we most likely come up with payroll. In case you have a small number of employees, it is quite manageable to handle the payroll in-house.
It can, however, become time-consuming if your company has more than 20 employees and has to deal with monthly payrolls.
That is not all that can be distressing; keeping track of taxes, bonuses, and other deductions, as well as employee joining and exit forms plus leave days, can become overwhelming.
The market size for Financial & Accounting Business Process Outsourcing (F&A BPO) was $60.31 billion globally in 2023 and is expected to grow at a CAGR(Compound Annual Growth Rate)of 9.1%, reaching $110.74 billion by 2030.
You may choose to outsource accounting services so as to take the financial burden off your shoulders and concentrate on growing your business further. Moreover, you will get additional savings and tax benefits from hiring an accountant.
Outsource skills you don’t have:
Generally speaking, most businessmen start their businesses on the basis of how good they are in certain fields and the things they love. To illustrate, Bill Gates initiated Microsoft because he had a passion for information technology.
You’ll likely begin in an industry you’re familiar with or know a lot about. However, as you grow your business, you’ll need to handle many different tasks, like sales and marketing, which might not be your strengths.
It’s common for entrepreneurs to face this challenge. Instead of struggling with areas you’re not skilled in, it’s smart to outsource all those tasks and scale faster.