what is outsourcing

What Is Outsourcing & as Strategic Tool, Is it Good for Business?

Outsourcing can provide you with strategic opportunities for improving your business by saving you time and money. Outsourcing can also enhance your competitiveness by providing you with a wider range of services and products. Remember, outsourcing is an option, not a necessity. It is important to carefully consider all your options before making a decision.

Businesses often think about outsourcing purely in terms of cost savings; however, outsourcing can do more than simply lower your expenses, despite cost-savings being the biggest benefit of outsourcing. As your business grows, outsourcing can be a way of promoting innovation, disrupting your industry, and accessing new skill sets that reposition your company within the market. Outsourcing can considerably enhance the operation’s performance. Such a ploy frees up time and resources to focus on your core business aspects. It allows your staff to concentrate on their main duties and on the future strategy.


The characteristics of outsourcing

Another outsourcing benefit is time savings in handing out seasonal and menial tasks to focus more on core competency and growing the company. In times when a business does not have in-house expertise on certain business activities, outsourcing can also be an excellent option. Leading companies understand that outsourcing some functions can help them gain a competitive advantage. This is accomplished by allowing them to access expertise or innovative technologies they do not have in-house; or by helping them deliver products or services more quickly; or by enabling them to shift resources to the areas of the business that are most critical. Outsourcing offers both cost-efficiency and increased workload flexibility.

How outsourcing can benefit start-up ventures

Outsourcing operations provides numerous benefits to businesses, from small start-up companies to major corporations. For one, it boosts their competitive advantage in the entire market industry. In this article, we explore how outsourcing benefits businesses by saving time and money while improving efficiency and competitiveness.

Outsourcing eliminates the need to hire permanent or full-time employees. 

It brings in a flexible workforce to perform tasks; such assistants are only paid when their help is needed, thus significantly reducing operating costs. When considering how outsourcing can help you grow, do not limit yourself to viewing the cost of hiring outside contractors versus handling a task with your current staff. Focus on the value that a contractor’s expertise adds to your company. Whether through expanding production, marketing your company more extensively, or disrupting the market in the way your industry does business, outsourcing can provide an opportunity for you to innovate, grow, and rise above the competition.

what is outsourcing - these are the benefits

The core benefit of outsourcing: saving you money

The main benefit of outsourcing is the reduction of gross costs and the possibility for the company to focus its resources on core activities. By outsourcing, companies can free up resources (i.e., cash, personnel, facilities) that can be redirected to existing tasks or new projects. Such projects may well deliver higher yields for the company than the functions that have previously been outsourced. More than merely saving, you can also reduce overall business costs. As such, this gives a company the means of keeping their overheads on a tight rein, while simultaneously growing the business. Outsourcing allows operations or departments that have cyclical demands to bring in additional resources when such is necessary. The outsourcing company can then be released when demands slow down again, maintaining a company’s flexibility.

What is outsourcing? 

Outsourcing can be defined as a staffing solution business agreement, which can be either domestic or international. The latter is known as offshoring, and moreover, outsourcing is a strategic-management enterprise whereby a company wants to advance through a competitive advantage. A business will make use of either a third-party company or virtual assistants located outside of their own business, to perform the services for them. This permits the company to enhance efficiency and effectivity of the company. In other words, outsourcing is the practice of having certain job functions accomplished by someone outside a company. The process of outsourcing business functions is also known as contracting out. Outsourcing is often used by companies to dial down and to focus on the core aspects of the business, spinning off the less critical operations to outside organizations.


Offshoring implies relocating work or services to third-party providers located overseas. These third-party agents or consultants to the main business perform certain business functions. Businesses typically outsource non-core activities to improve their efficiency and take advantage of the expertise found within other companies. This can also help you reduce costs; however, many companies find that this action is more advantageous when set in place for strategic purposes.

The reason that businesses outsource

The basic point of outsourcing is to bring in external specialists together with their knowledge and expertise to take over specific roles that would otherwise crowd the employees’ task lists. This may also shore up those staff members not performing well through lack of expertise.

what is outsourcing - these are the reasons why

Outsourcing as a strategic business mechanism

Outsourcing is a valuable strategy for firms to gain more benefits from the global supply chain. Moreover, outsourcing is a strategic decision by a company to reduce costs and increase efficiency by hiring another individual or company to perform tasks, provide services, or handle operations that were previously completed by employees within the company. Businesses that contract out shift tasks, operations, jobs, or processes to an external workforce; they accomplish this by contracting with a third party for a significant period. An example is using virtual customer service assistants located abroad. With this service offered, the business can be more competitive. Hiring a VA lowers the overall cost. However, this practice has drawn criticism for its impact on the labor market in domestic economies.

The bottom line

In the end, outsourcing as a practice of hiring a third party to perform business operations formerly accomplished by the company’s in-house staff, eliminates the need to hire permanent or full-time employees. It brings in a flexible workforce to perform tasks that will only be paid for at certain times. Such a temporary staffing arrangement significantly reduces operating costs. There are many benefits to outsourcing. However, to gauge whether this business strategy is right for you, we suggest that you make use of our complimentary consultation service. If our explanation has motivated you sufficiently to speak to our outsourcing expert, do book your call without delay.

The Ultimate Outsourcing Guide:

Aristo Sourcing Dark Yellow

Looking to Build a Remote Team?

Get FREE Consultation.