Why do companies outsource? Top 7 reasons from business leaders

by Andy Nguyen
why do companies outsource

Markets predicted that in 2019 the industry of cloud computing, which is mostly associated with outsourcing, would reach $200 billion US.

That’s a lot of outsourcing and that number only includes cloud computing!

So, why do companies outsource?

Outsourcing is a solid strategy to maximize efficiency, save costs, and improve core services.

Let’s take a look at the top 7 reasons why various business leaders opted to outsource.

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1. Cost savings

Rohan Bhansali Gozoop on Outsourcing

“Cost savings is the main advantage that outsourcing brings in. Even if you find the IT guy with the desired qualification and knowledge, it is likely to cost you a large amount of money. Outsourcing comes to you as a boon. In addition to hiring a company that already specializes in IT infrastructure, it gives you the cost benefit, which is often a fraction of what you would pay a full-time employee.” 

Rohan Bhansali 
Co-founder and Director of Gozoop, India’s largest independent digital agency

2. Scale quickly

Himadri Das on Outsourcing

“You don’t need to maintain huge headcount to achieve economy of scale as manpower can be acquired immediately on a contractual basis. Outsourcing is a very good proposition for startups in manufacturing that are looking to scale up fast.” 

Himadri Das
HR & Legal Compliance Professional

3. Network security

Roopen Roy - Sumantrana CEO

“With the IT resource quitting suddenly, valuable information, data regarding network and IT infrastructure could get lost or misplaced. Network security is another concern and so is the possibility to function efficiently in its temporary absence. Outsourcing does away with these worries by guaranteeing numerous resources and records that can be shared within your team.”

Roopen Roy
Former Managing Director of PWC India and Deloitte Consulting India
Founder and CEO of Sumantrana

4. Focus on growth

Laura Lee Sparks of Legal Marketing Maven

“Most entrepreneurs have great talents but many times they think they can do it all. That can really stall the growth of the business. By outsourcing the day to day back-office tasks, the business owner has more time to focus on generating income.” 

Laura Lee Sparks
Owner of Legal Marketing Maven

5. Remain competitive

David Walsh Source Control Author

Progressive entrepreneurs realize the unstoppable power of outsourcing to handle aspects of their business that are essential but simply don’t make sense for them to deal with personally. Small business, augmented by a global pool of human capital, can compete directly with the biggest players in their space, and win.”

David Walsh
Author of Source Control

6. Grow business

Tonya Thomas - The Small Office Assistant

“At first I felt like I was the only person who could do the work efficiently; I wanted control over everything. But I wanted my business to grow and in order to do that I had to let go and start delegating.”

Tonya Thomas
President of The Small Office Assistant

7. Delegate tangential processes

marc resnick

“Small businesses must identify their core competencies and capabilities and focus their own R&D, talent management and resources on being the best in their industry at these. Outsourcing any aspect of [these tasks] would be a big mistake because they would cease to offer anything that their own customers couldn’t get elsewhere. So a small business that focuses on product design should not outsource anything related to developing its internal design talent or their design activities. But they should investigate all opportunities for outsourcing tangential processes like payroll services, IT and so on.”

Marc Resnick
Ph.D. & a Small Business Consultant
Director of the Institute for Technology Innovation at Florida International University

Current Trends In Outsourcing
How Does Outsourcing Helps Save Time and Money?
How to Build a Better Business with Outsourcing

Also, check out our Complete Guide to Outsourcing for an in-depth discussion on the topic.

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