What is outsourcing? Is it worth delegating tasks to other companies?
The company’s development is associated with the emergence of an increasing number of tasks that need to be controlled. Are you wondering whether to delegate it to your own employees or to opt for the services of external companies? From the further part of the article you will learn what outsourcing is and what its advantages are.
Delegating tasks to employees and outsourcing – differences
Delegation of duties is a process, in which the company’s management or a specific department delegates part of the tasks to employees. Delegating does not only mean entrusting certain activities, but also involves redirecting responsibilities for their performance and the necessary permits to implement them. In the simplest terms, delegating tasks can be defined as sharing responsibilities and power with others – in this case with employees.
Handing over some of the duties to colleagues requires trust and confidence in their skills. However, you must be aware of the risk that the person, who has been entrusted with new responsibilities, may not meet them. The manager should always be prepared for such an eventuality and should support the employee in the initial phase. When delegating tasks, remember to specify the responsibilities and requirements that will be transferred to the employee.
Outsourcing is a solution for problems with too many tasks entrusted to one employee. The term literally means the use of external resources. In practice, it consists in commissioning some part of tasks to an external company specializing in a specific industry. The essence of outsourcing is the long-term entrusting of the functions of some departments to an external entity, rather than commissioning a single task.
Is it worth delegating tasks to other companies?
Outsourcing is associated with many benefits, so it is not surprising that it is gaining more and more supporters. Delegating tasks to external entities allows you to focus on strategic goals and the implementation of the company’s mission.
What will your company benefit from outsourcing? Its biggest advantages include:
- Reduction of costs associated with the redundancies and the lack of need to purchase equipment. When you decide to cooperate with an external company, you do not incur the costs of employees’ remuneration. Also, the amounts allocated for social security, pension and sick pay are reduced. What’s more, the company does not have to invest in employee training;
- Relieving the employees of the company who will now be able to focus on the most important elements of their work. Outsourcing allows you to remove the burden of excessive workload from your employees, enabling them to concentrate on doing what they can do best. Reducing the number of duties that distract an employee is usually associated with increased work efficiency.
- Time saving and the opportunity to focus on strategic goals. Using outsourcing services allows you to focus on acquiring customers, increasing profits, as well as carrying out the company’s mission and strategic goals. Process and application support, software development, employee recruitment are tasks that can be outsourced.
- The ability to use the services of experts. Cooperation with specialists ensures not only the highest quality of services provided, but also the possibility of introducing new processes to the company. Personnel training is usually associated with high costs and does not always bring the expected results, mainly due to lack of experience.
Outsourcing also has disadvantages …
Similarly to delegating tasks to employees, outsourcing carries some risk. By employing an external company, you can have an idea of the quality of the services it provides, unfortunately it will not always be in line with reality. The biggest dangers associated with outsourcing services include:
Risk related to disclosure of confidential information to external entities. Some outsourcing services require the transfer of confidential data concerning the company or its clients. Unfortunately, in this situation there is a risk of using this information against you or your company. You should always approach employing external companies with care. It is best to check the opinions concerning your potential business partner, and only use internal task delegation for some of the obligations.
- Poor quality of rendered services. Verification of an outsourcing company should not only concern its credibility, but also its competence. Entrusting important responsibilities to an external entity with unqualified staff does not bode well.
- Excessive desire to reduce costs. The price alone – albeit also important – should never be the main deciding factor in cooperation with an external company. Cost reduction is an important aspect of using outsourcing services, however it should never override common sense. Often, an attempt to significantly reduce costs is associated with employing a worse company.
- Lack of control over certain processes in the company. Ordering specific tasks with external entities limits your impact on how they will be implemented. Loss of control over important processes may adversely affect the functioning of your business.
What tasks should be outsourced to external companies?
Before you decide to hire an outsourcing company, take into account that delegating responsibilities to external entities should never concern tasks that are the main business of the company, the so-called core of business. If your company provides accounting services, do not outsource your clients’ accounting records to other entities.
The most popular areas of outsourcing services include:
- human resources administration,
- administration of IT systems,
- internal audit,
- bookkeeping and accounting,
- logistics and transport,
- customer service.
As you can see, outsourcing has many advantages, but you cannot forget about some of the risks that come with it. When deciding to cooperate with external entities, it should be approached with caution.