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Outsourcing has been plagued since the beginning. Some companies proudly position themselves against it. Others do it on the sly, creating the illusion that they do everything in-house. If you ignore the benefits of outsourcing and try to do everything yourself, your business is at a huge disadvantage – one that may be too big to overcome.
Outsourcing is often considered a dirty word in the business world. Companies, all too quick to take full credit for their success, love to present the brand illusion that they are completely responsible for their happiness. They prefer to hide their partners behind a veil of branded messages and stifling NDAs. Even companies that have announced the benefits of outsourcing may succumb to pressure to abandon outsourcing, albeit partially, in favor of insourcing.
In my industry of software development, outsourcing has often been further scorned. It is synonymous compared to a range of alternative expressions such as offshoring and nearshoring, all relying on low cost and low quality.
Despite all this negativity, outsourcing remains strong, with a industry worth an estimated $92.5 billion. The benefits to your business can be enormous. Not just for your bottom line, but for your entire business model. You can focus on the activities for which you are uniquely positioned to perform best, while outsourcing other activities to experts. With that in mind, let’s break down some of the myths about outsourcing and see how companies can reap the benefits of outsourcing while avoiding the pitfalls.
Outsourcing is only for simple tasks
This one outsourcing myth is clearly incorrect. Even entrepreneurs with the best intentions fall victim to this myth. They behave as if the only tasks that can be effectively outsourced are tasks with clear, rigid standard procedures, devoid of creativity. Many tasks fall into this category – data entry and scraping come to mind. But this narrow mindset ignores an entire industry of much more complicated tasks, such as direct response copywriting, video production, and even software development.
All of these require substantial training and education on the part of practitioners and it is in this truth that the advantage of outsourcing lies. In a competitive and sometimes unforgiving market like the one we find in the US, it’s not enough just to be good enough. The greatest economic rewards are earned by those who perform their craft at the highest possible level. Since all businesses have limited resources, if you maintain all functions in-house, you inevitably cannibalize your company’s ability to lean on the field it can dominate.
In short: outsourcing provides focus.
Related: 7 Things to Outsource Immediately to Scale Your Business
Outsourcing is only to save money
The immediate association of outsourcing with costs is doing the industry a significant disservice. The underlying assumption is positively colonial: you only outsource because you can’t afford the best. In this situation, America is supposed to be the best. As an immigrant who has lived here for six years, you will often agree with me on this statement. But as so often in life, there are no absolutes.
An example that is close to my heart is the development of blockchain. You just need to turn to Buenos Aires in Argentina, a city rich in talent for all kinds of blockchain applications, including DeFi, crypto and NFTs. A talent pool strengthened by continued government investment in early childhood technical education. And a healthy attitude of the population towards alternative forms of financing (whether or not influenced by their highly volatile currencies). In this example, outsourcing to Argentina is a sensible option.
In contrast, a US company trying to keep the same blockchain development function in-house faces two huge challenges:
- They compete with a $112.5 billion fintech industry in the war for talent.
- Going to struggle to compete with the big players, they will likely hire a developer who has come out of a 16-week bootcamp. They could have had an Argentinian with a master’s degree for less.
Related: Pros and Cons of Outsourcing and Hiring Internal Staff
Culture clashes are inevitable in outsourcing
The last resistance to outsourcing usually has to do with the fear that an outsourced team will not share the same values and culture as your in-house team. In today’s globalized world, people have never been exposed to more information about each other and our respective cultures. This concern is especially moot when it comes to Americans. If there’s one thing America has excelled at over the past 50 years, it’s exporting its culture, values, and brands. You will be hard pressed to find an outsourced team unfamiliar with America and its customer expectations.
Outsourcing will not disappear anytime soon. Your business can benefit greatly by reformulating your perception and relationship with the industry and the term.
Related: Here’s How to Know When to Outsource