Since the year 2000, global outsourcing has grown from a $45.6 Billion dollar industry to its current high of $104.6 Billion in 2014. Its consistent growth over the last 15 years proves global businesses have accepted it as a key development strategy. But is outsourcing right for you?

The new millennium was punctuated by events which greatly affected the global economy. Many businesses closed down, unemployment was rampant and homes were foreclosed. With demand for products and services declining in various industries worldwide, companies were forced to find strategies that would help streamline costs while they struggled to shore up revenues. Outsourcing was one of these strategies.

But the value of any business development strategy can only be determined by the need it serves and its implementation. Outsourcing is no exception. Here are a few questions you need to answer in order to decide if outsourcing is right for you:

What Do I Know About Outsourcing?

One of the biggest mistakes businesses that outsource make is not doing enough research on outsourcing. They only know of outsourcing’s ability to lower cost of operations. They are not aware of the other benefits of outsourcing:

  • Improve productivity
  • Increase business flexibility
  • Lower risk of business expansion
  • Capitalize on available technology
  • Build strategic partnerships
  • Lower incidence of employee turnover

Thus, the strategy is not being implemented to optimize its benefits. Before you decide to outsource, conduct research by interviewing businesses that have outsourced. Consult with outsourcing experts and other reputable resource people. Attend business forums, outsourcing road shows and conventions. Prepare a Project Study and a Business Plan which shall be your standby references.

Why Should I Outsource?

Every new venture is defined by its purpose. Why do you want to outsource?

  • Do you want to reduce business costs?
  • Do you want to improve revenues?
  • Have you weighed down by handling too many non- essential tasks?
  • Are there areas of your business that require higher levels of competencies?
  • Are you planning to scale up operations soon?
  • Do you want to establish your business presence in other parts of the world?

By defining your purpose, you will be able to set direction for your outsourcing strategy. It will be easier to identify goals and objectives as well as hire the right service provider and agents.

What Are My Goals and Objectives on Outsourcing?

Many companies that share outsourcing failed to deliver targeted results are usually the ones who set highly unrealistic goals and objectives. Instead of conducting in- depth research, all they focus on are the purported ROI from outsourcing.

They fail to realize that outsourcing is not an overnight cure for what ails your business. It will take some time for the full benefits to manifest itself on your bottom- line. Why? Because outsourcing is all about people and people need to adapt to the learning curve.

Technology is a major component of outsourcing but a more integral component is people. The item that contributes the most to cost savings is reduced cost of labor.

Regardless of the level of experience, people need time to become familiar with your type of business. In addition, there is the matter of adjusting to virtual collaboration instead of same space collaboration. Lastly, you have to contend with and adapt to cultural differences.

Which Services or Tasks Should I Outsource?

Once you have gained working knowledge on what outsourcing is, your purpose and an outline of your objectives focus should now shift to the services or tasks you plan to outsource.

If this is your first time to outsource, delegate non- essential services to get a feel of the process. Non- essential tasks are more administrative in nature and are intended to provide better organization and efficiency in your enterprise. A good example of this type of arrangement is when you decide to outsource work to your best virtual assistants.

Virtual assistants are people who work online and contracted to manage a pre-determined scope of work. They are primarily hired to handle non- essential tasks but the industry has expanded to accommodate more technical skills in response to demand from various businesses.

A Virtual Assistant can manage the following tasks:

On a larger scale, these tasks can be assumed by a third party outsourcing services company which has the infrastructure to manage a larger volume of work.
Once you are more familiar with how an outsourcing arrangement works and if the numbers show it is contributing significantly to your bottom line, then you can scale up your outsourcing program.

In large numbers, outsourcing service providers will charge you per seat per hour per work day. But it is reasonably easy to negotiate a lower rate per hour if the outsourcing partner agrees with the volume of work. That is the Law of Economies of Scale at work with outsourcing.

Where Can I Find a Reputable Outsourcing Services Provider?

There are many sources where you can find a reputable outsource services provider:

  • Online job platforms- Many outsourcing companies have accounts in various online job platforms such as Elance, Freelancer, Upwork and Guru. They also have accounts with online community job sites such as Monster, Indeed, LinkUp, SimplyHired and CareerJet.
  • Websites- There are outsourcing agencies and virtual assistant agencies that have active websites. A quick keyword search will provide you a good list of prospective agencies.
  • Organizations, Associations and Focus Groups. The highly reputable outsourcing service providers are usually members of a self- regulation organization. You can reach out to them for consultation.
  • Social Media- One of the most effective social media channels for finding your ideal outsourcing services provider is LinkedIn. You can easily connect with agencies and individual freelancers who are qualified to render service.
  • Referrals- Ask your social media community, family, friends and industry associates for referrals who can handle outsourcing projects. You can also join focus groups in social media and connect with people who are involved in outsourcing.

Lastly and collectively are two interconnected questions which will round out your decision to outsource:

  • What Should be My Level of Involvement in Outsourcing? Do not assume the outsourcing arrangement will have no problems from the get- go. You should be actively involved in the first three months of operation to make sure everyone knows what he or she are doing. After three months and depending on your assessment, slowly distance yourself and allow the outsourcing partner to manage their share of responsibilities.
  • What Documents Are Needed to Support an Outsourcing Agreement? Despite all of the benefits you can realize from outsourcing, it always better to err on the side of caution. Do not settle for a “handshake” or an e-mail. Send your client a draft of your Service Level Agreement, Memorandum of Agreement, Confidentiality Agreement and the Scope of Work. These documents should include provisions for pre- termination due to negligence and other causes.

Outsourcing is a highly effective business development strategy. But you have to make sure you have a keen understanding of the concept and a valid need for it so you can maximize its benefits for your business.

Written by our special guest blogger, Brett Russo, of Outsource WorkersBrett is a Licensed Real Estate Agent who has over 15 years of industry experience. He now manages over 100 Filipino staff specifically trained to help Australian real estate agents become more dollar productive.


You can find Brett at:


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