What is Outsourcing?

Mary Gormandy White
Many companies outsource IT work

What is outsourcing? If you've been keeping up with staffing trends, this question has probably crossed your mind. When a company utilizes independent contractors or another company to perform services on its behalf, the organization is engaging in outsourcing.

How Does Outsourcing Work?

If your company is interested in outsourcing, it's important to first assess the areas of the operation for which this approach might be the most effective. It's a good idea to look at the tasks that take up a large portion of your time, or the time of your staff members, that could just as easily be performed by someone outside of your company's core structure.

Many small business owners begin by outsourcing tasks that take their time and attention away from growing their operations. Outsourcing payroll, for example, can be very inexpensive. For an entrepreneur, the time freed up from doing payroll tasks can result in an opportunity to spend more time on revenue generating activities.

Frequently Outsourced Tasks

As companies are looking for ways to streamline their operations, outsourcing is becoming increasingly common and popular. Thanks to the trend toward outsourcing administrative functions, virtual assisting careers are among the most rapidly expanding professions for those interested in working as independent contractors. Other frequently outsourced tasks include:

  • Benefits Administration
  • Billing
  • Call Center Operations
  • Collections
  • Computer Programming
  • Construction
  • Data Entry
  • Human Resources
  • Information Technology
  • Marketing
  • Payroll
  • Sales
  • Training
  • Web Development

Is Outsourcing Right for Your Business?

Only you can decide if outsourcing certain tasks is in the best interest of your business. One thing that's certain is that outsourcing is a big component of many modern business models. When making decisions about what functions to keep in house versus which ones can be delegated to a contractor, it's important to consider the bottom line impact. If outsourcing some functions can lead to increased productivity in a cost effective manner, doing so can certainly be an integral component of your company's strategic business plan. .

What is Outsourcing?