Outsourcing certain functions empower startups to scale up the existing work processes. It helps startups focus more on growing and scaling the business.

Benefits of Outsourcing

As we said earlier, investing in outsourcing is beneficial as it helps startups save money, keep projects on track, and smartly manage time. Let us now have a look at the benefits outsourcing offers for startups.

Focus on Priority Tasks

Outsourcing frees in-house teams from undertaking repetitive tasks. While mundane activities are being taken care of by the outsourced team, the in-house team has time to refocus on important profit-generating activities like marketing, customer happiness, content creation, and more. The team can now realign their efforts to build brand reputation, provide high-value services, and conduct thorough research without any hassles. 

Increase the Team Efficiency

The outsourced team brings in years of experience and expertise that proves to be an asset for the overall business. The knowledge and understanding of the domain ensure increased productivity and efficiency. Thus, an outsourced team can help you achieve more in less time.

Save Money on Labor Costs

Hiring a full-time in-house team to carry out certain tasks requires you to pay salaries. These salaries are usually based on their experience and the economic status of the country. You can avoid these costs via outsourcing. You pay a fixed price to the outsourced company every month while saving money on labor costs. 

Decrease Costs for Infrastructure

Outsourcing eliminates the need for investing in infrastructure and technology. As the work is designated to an outsourced team, it is the responsibility of the outsourced company to develop the infrastructure and invest in the technology required to carry out the assigned tasks seamlessly.

Get Up and Running in Less Time

You can get your outsourced team started with your work quickly. All you need to do is provide them with a project brief and grant access to the tasks, passwords, and other documentation. With the right infrastructure and high-speed internet, they can start working on the tasks immediately.

Access to Industry Experts

Outsourcing companies are breeding grounds for expert talent. With outsourcing, you will have access to experts in web development, IT, human resources, marketing, accounting, and many other teams. You will not only get quality deliverables but also, have them completed on time.

Remember a long-term alliance with an outsourcing company will help the outsourced team understand your project well. The team will know the best methods to work and deliver quality solutions to you. 

Although outsourcing has increased the efficiency of startups, it does come with its share of challenges. However, with the help of the right technology and well-defined work processes, startups can overcome these challenges and ensure success at outsourcing.

1. No Prior Experience with Outsourcing

Outsourcing can be overwhelming as most startups are not familiar with the concept, best practices, and workflow when working with a new team. Conveying the vision and goals to an entirely new team can be a difficult task.

The best solution in situations like these would be to ask the outsourced team to walk you through their entire work process. This will help you define requirements properly, identify and avoid bottlenecks, and get the required tasks completed on time.

2. Contract Negotiation

The next challenge that startups face when outsourcing is negotiating the contract terms with the outsourced team. Defining the scope of the work, roles, and responsibilities for a service-level agreement is not child’s play. 

Further, fine-tuning the contract to suit both teams’ requirements involves thorough planning. It is a time-consuming process. 

Setting clear project requirements is certainly the first step toward drafting an excellent contract. Conduct multiple meetings to convey clear requirements and desired expectations before drafting the contract. 

In addition to this, discuss the situations when the outsourced team fails to deliver the expected deliverables. It is always wise to sign an NDA and other regulatory documents before starting the project.

3. Cost Estimation

Although outsourcing is a cost-effective solution, it could be a costly affair if not properly planned. Calculating an accurate cost for the outsourced tasks is one of the most widely spoken outsourcing challenges.

Define the exact requirements and share the same with the outsourced team. Additionally, share the budget limitations with the team to avoid any misunderstandings. An ideal outsourcing company will design a customized pricing model based on the requirements and budget.