Outsourcing: What, Why & When?

Every business – Small, Medium, or Large-sized – wants to grow. When the growth happens, it becomes the responsibility of the whole team to sustain the business’ competitive edge. Hence, the need to focus on strategic and technical competence arises while doing away with the company’s non-core functions.

Here is where outsourcing comes into the picture. With plans to shape the future of business activities in place, keeping up with all the activities a company requires to exist internally takes up time, increases costs, impedes flexibility, efficiency, and performance,

For most businesses, the best bet is to outsource some functions which are not core of their competence to profound professionals in a way that fosters productivity, reduces cost, and increases task delivery time as against having to do these tasks internally.

According to Chuks Cohn – Founder & CEO of Varsity Tutors – businesses should outsource:

  • Tasks that are critical to operations but not a vital component of strategy such as Accounting, Tax Remittances, Talent Acquisition, etc.
  • Non-Core functions such as Digital Marketing, Website Development, Cleaning Services, etc.

But when should you outsource some of your operational functions?

Knowing when to outsource can provide the best results for your business. This is because using a vendor with the specialist skills that you do not have in your business can speed up delivery, ensure productivity, identify margin opportunities, and flag down risks. In turn, these help businesses focus on their competitive strengths and technical competence.

Lydia Adams – Vice President, M&C Personiv – suggested that your business should outsource when you:

  • Need to lower costs.
  • Need to focus on your business-critical functions.
  • Need to free up time for strategic development.
  • Need to have profound professionals execute special tasks for the growth of your business such as due diligence, restructuring, business process improvement, etc.
  • The business is growing fast in terms of market share and demand just like the way Apple leverages outsourcing for efficiency.

“If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”

Lee Kuan Yew – Former Prime Minister of Singapore


The material contained in this publication is provided for general information purposes only and does not contain a comprehensive analysis of each item described. Before taking (or not taking) any action, readers should seek professional advice specific to their situation. No liability is accepted for acts or omissions taken in reliance upon the contents of this alert.

AOA Professional Services is an indigenous tax, regulatory and advisory service firm driven by the values of professionalism and partnership. For further information on the subject matter, reach out to our Teleconsulting Desk

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