Top Myths & Facts about Outsourcing Business

  • Kevin Oskow
  • September 21, 2016
  • 4 Minute Read
Top Myths & Facts about Outsourcing Business

A business always seek for opportunities to tackle challenges and grab competitive advantages. That’s where outsourcing play its role and yet now with increasing demand it has become the vital part for many organizations from small businesses to big enterprises. Once outsourcing was synonymous with cost cutting and job losses, now it has reached to the point where it is defining customer value or valued customer.

Outsourcing, deeply rooted from the past

The famous economist David Ricardo describes outsourcing long ago as ‘the theory of comparative advantage’. Simply stated, the theory says that business outsourcing occurs due to difference in (production) technology. It can happen when the trade is advantageous to both parties. Conversely, a developed country can compete against some low foreign wage countries. So, we concludes that there were many factors other than cost in the past to consider outsourcing for any business. This shows that outsourcing is no new concept and it’s being adopted by businesses and conceptualized by economists long ago.

Top myths of outsourcing debunked

Myth: Outsourcing requires a mature organization or it is only meant for big companies.

Fact: Outsourcing is for all- startups to big companies. Outsourcing can help any business from the initial stage to large enterprise-grade operations. The best example of this model is KloutAppSumoGitHubUpworkSlackMYSQLOpera and eCommerce giant Alibaba, which started small and yet now these have become big with meteoric growth. It’s about flexibility, scalability, and availability of resources in a cost effective way. This simply attracts more and more investors to put their trust and money in and help small businesses grow exponentially BIG.

Myth: Communication creates a big loophole.

Fact: Today in this competitive business environment where everyone want to stay ahead, makes sure that they have an expert communicator’s team by their side. Outsourcing companies are well equipped with modern infrastructure facilities and uses advanced tools such as video conferencing, phones, and VOIP connections to streamline the entire business process.

Myth: Outsourcing companies are located in the political unstable countries, making business process risky.

Fact: Today outsourcing your business requirement to a country like India is highly trustworthy. India has become the center for outsourcing business from last two and half decades. At 7.6% in FY16, India is now the fastest growing economy of the world. At this growth level you can count on political and financial stability of the country.

Myth: Most companies outsource work to reduce cost.

Fact: More and more companies opting for outsourcing on the basis of value. Meanwhile, service providers adopt innovative technologies to deliver values to the clients. Modern companies are using innovative technologies to transform processes by focusing on value creation.

Myth: Outsourcing causes security problems and risks intellectual property rights.

Facts: These days outsourcing companies have adopt strict business policy and processes. You can sign a non-disclosure agreement (NDA) with the company to which you are assigning the project task. These days outsourcing companies work in a close collaboration with clients and all IP rights belong to the clients. By signing a contract with the outsourcing company you can be assured of your intellectual property rights.

Myth: The difference in time zone creates obstacles in outsourcing IT projects.

Fact: Different time zones are no threats to the outsourcing business as companies operates on flexible timings by putting different teams as per requirements. There is availability of different specialized teams working at different time-zones. Based on your time-availability and requirements you can choose most suitable team for your projects.

“By 2020, outsourcing spending is forecast to approach $3.8 trillion.”
– Gartner

There are businesses that avoids using the term outsourcing as they call it technology partnership. A good outsourcing partner is one who eliminates all your doubts and delivers assured services on time. Today’s leading companies are approaching outsourcing for innovation to activate, create, integrate, and amplify their business value. Employers are using innovation in outsourcing to improve quality and user experience.

Value is fast replacing the cost factor and now outsourcing is more likely to be measured by how service providers empower businesses grow through innovations.

In a nutshell, we can elaborate that the primary reason for outsourcing is global expansion and to add value in terms of capability and capacity.

The Watermelon Effect

It defines “the state of sub-optimal relationship existing between customer and their outsourcing partners. Green and smooth from outside and Red and fragile from inside.”

Is your outsourcing relationship GREEN from the outside and RED from the inside? Is your outsourcing experience lacking of attention, innovation, automation, and attention?

If the answer for above questions is yes, it’s time to move from RED to GREEN.

We can help you elevating your state of discontentment to a delighting experience. The need of the hour is a fresh approach towards innovation, automation, and customer centricity.

Our Approach: The Monks Way

Experts are enhancing web at Uplers, they are content with expertise, confidence, and passionate for the service.

Improving efficiencies, reducing costs, ensuring business continuity, better access to expertise, allowing staff to focus on core strategy, mitigating risks by using specialists, and enhancing overall value are things that we apply in our approach in delivering most promising web development service.

How is your outsourcing agency or technology partner offering its service to you? Are you considering factors for Outsourcing web project before zeroing in on your technology partner? It’s time to analyze and move forward.

Talk to our executive to start with expertise, innovation, and attention to create ultimate VALUE.

Kevin Oskow

Kevin OskowLinkedin

VP - Client Success
Based in San Diego, Kevin takes ownership of the client success at Uplers as the VP. Along with being an aspiring pianist, a proficient communicator, and a hiking lover, he is highly experienced. With more than 2 decades of proven track record, he can proactively lead your marketing, web development, and client experience teams.